What You Need to Know About Minimum Wage Increases in Denver

Colorado Gap Fund logoThe minimum wage in Denver is officially going up to almost $16 an hour by 2022.

Denver Mayor Michael Hancock made it official this Wednesday, when he passed Council Bill 19-1237 into city law during a signing ceremony at the City and County Building.

The signing comes two days after Denver City Council unanimously approved the measure to thunderous applause. The new law is aimed at confronting wage inequity and cost of living affordability for 90,000 Denver residents who live and work in the city, city officials said.

What is the rollout timing of the law?

A law (H.B. 1210) signed by Governor Jared Polis on May 28, 2019 repealed an existing ban against local governments hiking their local wage requirement beyond the state minimum wage.  Local governments in Colorado can now boost their minimum wage above the state and Denver becomes the first with Council Bill 19-1237.  The minimum wage in the city of Denver is set to increase starting January 1, 2020.

What’s the minimum wage in Denver?

Mayor Hancock signed the proposal on November 27th to increase Denver’s minimum wage to $12.85 on January 1, 2020; $14.77 on January 1, 2021; and $15.87 on January 1, 2022; and will be reviewed each year for inflation-related adjustments starting January 1, 2023.  The tip-credit wage for tipped employees is set at the state’s $3.02 per hour.

The tip-credit wage for 2020 will be $9.83 as long as employers can show that tipped employees make at least $3.02/hour in tips.

The Colorado state’s minimum wage is set to increase to $12.00 an hour on January 1, 2020 but employers located in Denver will be required to pay the higher minimum wage.

Minimum Wage Increase sign

What are the penalties if the law is not followed?

Violations for a first offense penalty can be up to $50 a day for each impacted employee.  Second and third offense penalties can range from $10 to $75 a day for each impacted employee, plus a fine ranging from $1,000 to $2,500.  After the third offense, the penalties can range from $50 to $100 a day for each impacted employee, plus a fine ranging from $2,500 to $5,000.

Denver Minimum wage increase penalty chart

How can RASI assist restaurants to remain in compliance with the law?

RASI’s Compliance Department monitors and updates minimum wage calculations when an increase occurs to ensure that employees are paid at least minimum wage for all hours worked, including tipped employees.  For example, a tipped employee must make at least $3.02 per hour in tips for an employer to pay a tip-credit wage of $3.02 less than minimum wage.  RASI’s payroll system will calculate the average tips earned for each tipped employee, if a tipped employee did not earn the minimum threshold of $3.02 per hour a makeup wage would be added to the employee’s paycheck in the amount of the tip shortage to bring the employee’s average hourly wage, including tips, to $12.85 in 2020.  This calculation is burdensome on any restaurant that utilizes a tip-credit wage so the automation in RASI’s payroll system is a no-brainer for the restaurateur.

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