The minimum wage rule enacted in 2006 to the Colorado Constitution requires the state’s minimum wage rate to be adjusted each year for inflation. The inflation adjustment is based on the US Bureau of Labor Statistics’ Consumer Price Index for All Urban Consumers (CPI-U) for the Denver-Boulder-Greeley combined area. This adjustment is based on the difference between the CPI-U from the first half of the prior year and the first half of the current year. The CPI-U increased 1.7% from the first half of 2009 compared to the first half of 2010.  This adjustment will increase the 2011 minimum wage rate to $7.36 per hour, effective January 1, 2011.  The Tip credit for 2011 has changed, so the minimum wage rate for “Tipped Employees” will be $4.34 ($7.36 – $3.02).

The current federal minimum wage ($7.25 per hour) is lower than the new state minimum wage, so the higher state rate will need to be used by all employers. Colorado employers that are allowed to use the tip credit will need to use the state’s minimum wage rate for tipped employees of $4.34 as well. 

For More information please go to the Colorado Department of Labor’s information page.