Colorado MINIMUM WAGES

Colorado State Minimum Wage for 2025

According to the Division of Labor Standards and Statistics, Colorado has increased minimum wage rates to $14.81 per hour starting January 1, 2024. This is up from $14.42 per hour in 2024. Similarly, the tipped workers are now entitled to $11.79 per hour, which is $3.02 less than the standard minimum wage, maintaining the tip credit system. The state government makes annual adjustments to minimum wage rates to keep pace with inflation and the cost of living. It’s also the seventh-highest pay in the country.   

Most local cities have a higher minimum wage rates than the State’s average like the following:

• Denver’s minimum wage rate rose to $18.81 per hour for non-tipped employees and $15.79 for tipped workers.
• Boulder City’s minimum wage stands at $15.57 per hour, while the rates across unincorporated Boulder Country is $16.57 per hour.

Colorado has also set overtime laws that mandate employers to pay 1.5 times the regular pay rate to all employees who work beyond 40 hours per week. This makes Colorado’s overtime minimum wage $22.22 per hour. 

These increases support Colorado’s goal to maintain a livable wage for workers statewide while recognizing regional cost-of-living differences. Employers must comply with both state and local minimum wage laws and ensure proper overtime compensation.

Minimum Wages in Colorado Cities

The table below details minimum wage rates across different cities of Colorado.  

Threshold For Employees Exempt

Similar to non-tipped and tipped workers, the salary threshold of exempt employees has also increased. Administrative, executive, and professional (EAP) employees will now receive $1,086.25 per week, or $56,485 per year, up from the previous $1,057.69 per week ($55,000 annually) in 2024. However, these employees must meet the specific job duty criteria to be considered in the exempt category.   

The salaries of many other exempt employees have also been revised, effective January 1, 2025. These are as follows: 

• Highly technical computer employees must be paid either $34.07 per hour or the EAP equivalent salary. 

• Highly compensated employees must be paid $127,091 annually and at least the EAP salary weekly. 

• The pay of certain covered drivers, driver’s helpers, and seasonal or outdoor education staff has also been updated.  

These thresholds are annually based on the Denver-Aurora-Lakewood Consumer Price Index (CPI), that reflects a 2.7% increase applied for 2025.

Historical Data of Colorado Minimum Wages

The wages of many low-wage jobs in Colorado have increased over the last couple of years. This has resulted in a notable decline in the percentage of low-wage workers in the state. For example, the percentage of dishwashers and wait staff (waiters and waitresses) classified as low wage dropped from 64% and 76% in 2020 to 42% and 53% in 2022, respectively. The table below discusses the changes witnessed in the minimum wage since 1968. 

Here are the key milestones of Arizona:

• First Wage Increase (2007): Arizona witnessed its first wage increase in 2007. It marked a move away from static wage structures to gradual and incremental wage rate raises.
• Proposition 206 (2016): 2016 was a critical year when Proposition 206 was passed to increase the minimum wage rate to $12 per hour by 2020. The approach also aimed to address income inequality and align wage growth with the cost of living.
• Incremental Wage Increases (2017-2020): Following Proposition 206, Arizona saw a gradual increase in minimum wages and achieved the $12 per hour minimum wage goal in 2020.
• $12 per Hour Achieved (2020): The achievement reflected the state’s commitment to ensure fair compensation and offer an equitable environment to the workers.
• Annual Inflation Adjustments (2021 and beyond): Understanding the importance of fair pay, Arizona has introduced a system to ensure annual pay adjustments for inflation. This will protect workers against economic fluctuations and other unforeseen events.

The table below explains all the changes witnessed by the state:

* – Under the FLSA, the two rates shown in 1968, 1970, and 1976 reflect the former multiple-track minimum wage system in effect from 1961 to 1978.

*** – The minimum wage rates indicated applies only to women and minors.

Source: https://www.dol.gov/agencies/whd/state/minimum-wage/history

Meanwhile, the wages of workers in the lower pay brackets also saw an uptick, outpacing inflation. The lowest 10% of earners have seen nearly a 17% increase in inflation-adjusted wages between 2018 and 2022, while the twenty-fifth percentile witnessed a 12.4% increase. 

Although these groups have seen real gains over the past decade and during the pandemic, the rising cost of living has limited the impact of these wage gains. However, the slowing growth in jobs in recent times raises concerns that these gains may soon evaporate. 

A recent report also suggests that people who earn less than $25,000 per year saw only a 0.5% increase in real wages, while those earning $50,000 a year saw a 1.3% decrease. Similarly, a report by Colorado Center on Law and Policy states the hourly wage needed for a worker to support their family in Denver is $40.46. This is far out of reach compared to the city’s minimum wage rate. 

Exemptions In Minimum Wages of Colorado  

Exemptions in minimum wages ideally refer to certain categories of employees or workers who are not covered under the Colorado state’s standard minimum wage laws or are subject to different wage standards.  

Exemptions in Colorado’s minimum wage rules are as follows: 

• Executives, Administrative Decision-makers, or Professionals (EAP) who perform certain exempt duties or earn a minimum of $1,086.25 as full-time employees.
• Outside salespersons
• Elected officials and their staff 
• Bona fide volunteers for nonprofits 
• High school or college students employed as part of a vocational training program
• Workers who are less than 18 years old, especially particularly if they are working in certain types of jobs or training positions 
• Highly technical computer-related employees
• Highly compensated employees who,
  • Do office or non-manual work such as non-managerial electricians, etc. 
  • Frequently and consistently carry out one or more tasks related to exempt EAP duties 
  • Receive at least EAP equivalent salary weekly, and 2¼ times that salary yearly ($123,750 in 2024)

• Immediate family members of the employers 
• Certain agriculture workers   
• Independent contractors 
• Tipped employees who earn tips, such as waiters, waitresses and bartenders.