Colorado minimum wage increase 2026: What employers need to know
Colorado’s minimum wage rises again on January 1, 2027.
Colorado’s minimum wage in 2026 is $15.16 per hour ($12.14 for tipped employees) and rises to $15.71 per hour ($12.69 tipped) on January 1, 2027. The new rate applies to employers statewide and holds through December 31, 2027.
The 2027 increase is 3.6%, and the state rate is up 41.5% since 2019. Many Colorado workers earn more than the state rate: Denver’s local minimum wage rises to $19.84 in 2027, and other localities set their own higher rates.
Below is a complete employer guide to Colorado’s minimum wage for 2026 and 2027, including local rates, tipped wage, overtime math, salary thresholds, and a payroll checklist. For other states, see our minimum wage by state guide.
Colorado minimum wage rate history (2019 to 2027)
Colorado’s minimum wage has risen every January 1 since 2019, from $11.10 to $15.71. Voters set the path to $12.00 in 2020; since 2021 the rate has been adjusted each year for inflation. The tipped cash wage has always been the full rate minus a fixed $3.02 tip credit.
Colorado minimum wage by effective date, 2019 to 2027:
| Effective date | Minimum wage | Tipped cash wage |
|---|---|---|
| January 1, 2027 | $15.71/hr | $12.69/hr |
| January 1, 2026 | $15.16/hr | $12.14/hr |
| January 1, 2025 | $14.81/hr | $11.79/hr |
| January 1, 2024 | $14.42/hr | $11.40/hr |
| January 1, 2023 | $13.65/hr | $10.63/hr |
| January 1, 2022 | $12.56/hr | $9.54/hr |
| January 1, 2021 | $12.32/hr | $9.30/hr |
| January 1, 2020 | $12.00/hr | $8.98/hr |
| January 1, 2019 | $11.10/hr | $8.08/hr |
The federal minimum wage is still $7.25 per hour, unchanged since July 24, 2009. When federal, state, and local rates differ, Colorado employers must pay the highest one.
Sources: CDLE 2027 minimum wage announcement (2026 and 2027 rates); CDLE INFO #1: COMPS and PAY CALC Orders (2025 rate and past Colorado minimum wages by year).
Will Colorado’s minimum wage increase in 2027?
Yes. Colorado’s minimum wage rises $0.55, from $15.16 to $15.71 per hour, on January 1, 2027. That is a 3.6% increase, and the tipped cash wage rises the same $0.55, to $12.69.
The Colorado Constitution requires an inflation adjustment every year. Here is how the next rate gets set:
- Inflation measure: The Colorado Department of Labor and Employment (CDLE) uses the Consumer Price Index for All Urban Consumers (CPI-U) for the Denver-Aurora-Lakewood area. Denver’s local minimum wage uses a different index, the CPI-W, so the two rates move by different amounts.
- Announcement: CDLE’s Division of Labor Standards and Statistics (DLSS) announces the rate in late summer. The 2027 rate was announced on August 13, 2026.
- PAY CALC Order: CDLE publishes the rate, the tipped wage, and the exempt salary threshold in its annual PAY CALC Order each fall.
- January 1: The new rate takes effect statewide.
The 2028 rate will follow the same steps, with an announcement expected in August 2027.
Colorado city and county minimum wages (2026 and 2027)
Four Colorado localities set a minimum wage above the state rate, topping out at $19.84 in Denver and Edgewater in 2027. If employees work in one of these places, pay is the local rate for hours worked there.
Colorado local minimum wages:
| City or County | 2026 rate | 2026 tipped cash wage | 2027 rate |
|---|---|---|---|
| Denver (city and county) | $19.29/hr | $16.27/hr (food and beverage only) | $19.84/hr ($16.82 tipped) |
| Edgewater | $18.17/hr | $13.50/hr | $19.84/hr |
| City of Boulder | $16.82/hr | $13.80/hr | $18.17/hr |
| Unincorporated Boulder county | $16.82/hr | $13.80/hr | Not yet announced |
Denver adjusts every January 1 using the CPI-W, and its tip credit applies only to food and beverage workers who receive at least $3.02 an hour in tips. Edgewater has tied its rate to Denver’s for 2027. Boulder County had not announced its 2027 rate as of yet.
A 2025 state law lets localities with a higher minimum wage set a larger tip credit, so local tipped cash wages no longer always equal the local rate minus $3.02. Check each city’s posted tipped wage rather than calculating it.
Source: CDLE’s local minimum wage table at cdle.colorado.gov/dlss, the list CDLE points employers to.
Tipped wages and overtime: how to do the math at $15.71/hr
Colorado allows a maximum tip credit of $3.02 per hour, so tipped employees earn at least $12.69 per hour in cash wages in 2027. Because the credit is fixed, the cash wage rises by the full $0.55 along with the minimum wage:
- Minimum wage: $15.71/hr
- Less maximum tip credit: $3.02
- Cash wage due: $12.69/hr
If a tipped employee’s cash wage plus tips doesn’t reach at least $15.71 per hour for the workweek, the employer must pay the difference.
Colorado overtime rules
Colorado pays overtime on a daily and weekly basis, not just weekly. Under the COMPS Order, nonexempt employees earn 1.5 times the regular rate for hours worked:
- Over 40 in a workweek
- Over 12 in a workday
- Over 12 consecutive hours, even if the shift crosses midnight
Whichever calculation produces more overtime hours wins; the same hour is not paid as overtime twice. Overtime for a tipped employee is calculated on the full minimum wage, not the cash wage.
Colorado overtime rates at the $15.71 minimum wage:
| Employee type | Regular rate | Overtime rate (1.5x) | Tip credit | Cash overtime rate due |
|---|---|---|---|---|
| Standard hourly employee | $15.71/hr | $23.57/hr | $0.00 | $23.57/hr |
| Tipped employee | $15.71/hr | $23.57/hr | $3.02 | $20.55/hr |
| Denver standard employee | $19.84/hr | $29.76/hr | $0.00 | $29.76/hr |
| Denver tipped (food and beverage) | $19.84/hr | $29.76/hr | $3.02 | $26.74/hr |
Calculating tipped overtime as $12.69 × 1.5 ($19.04/hr) underpays by $1.51 per overtime hour.
The most common mistake is tracking only weekly hours. An employee who works three 14-hour shifts totals 42 hours: weekly-only tracking pays 2 overtime hours, but Colorado’s daily rule requires 6. That gap underpays $31.42 for the week at the state minimum.
Remember that the regular rate includes more than the hourly wage. Shift differentials and nondiscretionary bonuses raise the regular rate, so overtime must be calculated on the higher figure.
Colorado exempt salary threshold for 2026 and 2027
Salaried employees in Colorado must earn at least $57,784 per year ($1,111.23 per week) in 2026 to be exempt from overtime. That is far above the federal threshold of $684 per week ($35,568 per year), so an employee who is exempt under federal law may still be nonexempt in Colorado.
Since 2025, the threshold rises each year by the same inflation figure used for the minimum wage. Applying the 2027 increase puts the 2027 threshold near $59,900; CDLE publishes the exact figure in its 2027 PAY CALC Order.
| Exemption | 2026 threshold | 2027 threshold |
| Executive, administrative, professional | $57,784/yr ($1,111.23/wk) | About $59,900/yr (pending 2027 PAY CALC Order) |
| Highly compensated employee | $130,014/yr | 2.25x the 2027 exempt salary |
Salary alone is not enough. The employee must also pass the duties test for the specific exemption. If a manager’s salary falls below the threshold on January 1, 2027, either raise the salary or reclassify the role as nonexempt and track hours and overtime.
Sources: 2026 COMPS Order poster; 2026 PAY CALC Order.
Colorado minimum wage payroll checklist for January 1, 2027
January 1, 2027, falls on a Friday, so most pay periods that include it need to be split. Use these eight steps to stay compliant:
- Pay by date worked. Minimum wage compliance is based on when the work was performed, not when the paycheck is issued.
- Split pay periods that include January 1. Hours worked through December 31, 2026, are paid at $15.16/hr ($12.14 tipped cash wage). Hours worked on or after January 1, 2027, are paid at $15.71/hr ($12.69 tipped).
- Example: A biweekly paycheck with 40 hours worked December 24 to 31 and 40 hours worked January 1 to 6, with no overtime, equals (40 × $15.16 = $606.40) + (40 × $15.71 = $628.40) = $1,234.80 in gross wages. Read our guide on how pay periods work for more on pay period math.
- Map every employee to a work location. Apply the highest of the state and local rate for where each hour is worked. Crews working in Denver, Edgewater, or Boulder must be paid those rates for those hours.
- Update overtime rates. Set minimum overtime at $23.57/hr ($20.55/hr cash wage for tipped staff), and confirm your overtime: after 12 hours and after 12 consecutive hours.
- Check exempt salaries. Raise any exempt salary below the 2027 threshold, or reclassify the role as nonexempt.
- Update tip credit notices. Tell tipped employees the new $12.69 cash wage and $3.02 tip credit before applying the credit, and use each city’s posted tipped wage for local hours.
- Post required notices. Display the 2027 COMPS Order poster (CDLE releases it each December), any local minimum wage poster, and the federal FLSA poster.
- Review wage compression. Check pay for employees earning between $15.71 and $17.75 per hour. Adjusting pay for longer-tenured staff keeps experience-based pay gaps in place.
Employer cost breakdown: wages and payroll tax impact
Moving a full-time employee from $15.16 to $15.71 per hour adds $1,144.00 in annual gross wages (40 hours/week × 52 weeks = 2,080 hours). Employer FICA taxes (6.2% Social Security + 1.45% Medicare = 7.65%) add another $87.52 per year per employee.
Added annual cost of Colorado’s $15.71 minimum wage by number of full-time employees:
| Full-time minimum wage employees | Added annual gross wages | Added employer FICA (7.65%) | Total added annual cost |
| 1 employee | $1,144.00 | $87.52 | $1,231.52 |
| 5 employees | $5,720.00 | $437.58 | $6,157.58 |
| 10 employees | $11,440.00 | $875.16 | $12,315.16 |
| 25 employees | $28,600.00 | $2,187.90 | $30,787.90 |
Colorado’s Family and Medical Leave Insurance (FAMLI) premium applies to all wages, so it rises slightly with pay. The 2027 premium drops to 0.86% of wages, split between employer and employee for employers with 10 or more employees. Colorado unemployment insurance premiums apply only up to the annual chargeable wage base, and workers’ comp premiums are based on payroll, so expect a small increase there.
How Colorado’s minimum wage affects hourly workforces
The $15.71 rate applies statewide, but the real impact depends on where each hour is worked and how you price and staff your work:
- Health care and long-term care: 12-hour shifts are common, and any hour past 12 in a day or 12 consecutive hours, triggers Colorado overtime even when the week stays under 40. Facilities in Denver pay $19.84 for every role on site, from aides to dietary and housekeeping staff.
- Construction and specialty contractors: Fixed-price bids signed in 2026 were likely estimated at $15.16/hr labor. Review active jobs for margin and update job costing rates for new estimates, including daily overtime on long pour or shutdown days.
- Field services (HVAC, landscaping, cleaning, pest control): Crews often cross city lines in a single day. Hours worked in Denver, Edgewater, or Boulder must be paid at those cities’ higher rates, so track hours by job location.
- Staffing agencies: Client bill rates need to rise with pay rates to protect margins. A $0.55 pay increase requires more than $0.55 in bill rate, since employer taxes and workers’ comp rise with wages. Placements in Denver need a separate bill rate built on $19.84.
- Restaurants and businesses with tipped staff: The cash wage rises to $12.69 statewide and $16.82 in Denver. On slow shifts, check that tips still bring every tipped employee to the full minimum, since the employer covers any shortfall. Resort and ski-town employers should also confirm whether a seasonal overtime exemption applies before changing schedules.
Penalties for noncompliance
Underpaying the minimum wage in Colorado can cost several times the wages owed. The Colorado Wage Act (C.R.S. § 8-4-109) sets out these consequences:
- 14-day window: After an employee sends a written demand or files a claim, the employer has 14 days to pay all wages owed.
- Automatic penalties: If wages aren’t paid within 14 days, the employer owes the wages plus a penalty of 2 times the unpaid amount or $1,000, whichever is greater.
- Willful violations: If the failure is willful, the penalty rises to 3 times the unpaid amount or $3,000, whichever is greater. A second similar violation within five years counts as willful automatically.
- Late payment of orders: If an employer doesn’t pay a CDLE order within 60 days, penalties rise by 50% or $3,000, whichever is greater.
- Misclassification fines: Misclassifying an employee as an independent contractor can add fines of $5,000 to $50,000 per affected employee.
- Attorney’s fees and local enforcement: Employees can recover attorney’s fees. Denver Labor separately enforces Denver’s minimum wage with its own penalties.
Employees can file a wage complaint with CDLE’s Division of Labor Standards and Statistics or go to court. Claims can generally reach back two years, or three years for willful violations.
Source: CDLE fact sheet on SB 22-161 wage enforcement.
Colorado minimum wage FAQs for employers
This article is for general informational purposes only and isn’t legal or tax advice. Minimum wage rules can change. Confirm current requirements with the Colorado Labor Department of Labor and Employment, your city’s labor standards office, or an employment attorney.
Sources
- CDLE: Colorado minimum wage will increase to $15.71/hour in 2027
- CDLE: 2026 COMPS Order poster
- CDLE: 2026 PAY CALC Order
- CDLE: Fact sheet on SB 22-161 wage enforcement
- CDLE: Division of Labor Standards and Statistics (local minimum wage table)
- Colorado Sun: 2027 minimum wage and local rates
- U.S. Department of Labor: Consolidated State Minimum Wage Table (July 1, 2026) and FLSA Employee Rights poster (WH1088)
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