Colorado’s Minimum Wage Expected to Increase in 2012

  • Posted by: J. Kent Gervasini |
  • 11/9/11 |
  • 6:17 AM
Colorado’s Minimum Wage Expected to Increase in 2012

Colorado Constitution Requires Annual Minimum Wage Adjustment for Inflation

Article XVIII, Section 15 of the Colorado Constitution requires the Colorado minimum wage to be adjusted annually for inflation. The state minimum wage is tied to the Consumer Price Index for the Denver-Boulder-Greeley region. The pending increase is directed by a 2006 constitutional amendment that provides annual cost-of-living adjustments to the minimum wage.

28 Cent Increase Effective January 1, 2012
  • The proposed increase will be effective January 1, 2012 
  • Minimum wage will increase to $7.64 per hour, a 28 cent or 3.8% increase over the year 2011
  • The minimum wage for “Tipped Workers” (employees who regularly receive tips) will increase to $4.62 per hour from $4.34 per hour
Colorado State Minimum Wage – 5 Year History
January 1, 2011 Increased to $7.36 per hour
January 1, 2010 Decreased to $7.24 per hour
January 1, 2009 Increased to $7.28 per hour
January 1, 2008 Increased to $7.02 per hour
January 1, 2007 Increased to $6.85 per hour

Colorado State Minimum Wage vs. Federal Minimum Wage

If an employee is covered by federal and Colorado state minimum wage laws, then the employer must pay the higher minimum wage. Therefore, even though the federal minimum wage is $7.25 an hour, Colorado employers will be required to pay $7.64 per hour for their employees beginning January 1, 2012.

What is the Minimum Wage Worker's W2?

A Colorado full-time employee (FTE) that would benefit from this increase usually works 40 hours in one work week. If you were a minimum wage, hourly worker who worked 2,080 hours in a year without overtime in Colorado, your annual income would be $15,891.20. Here is the calculation:
$7.64 per hour x 2,080 work hours per year = $15,891.20

On the other hand, if you lived in one of the states in our union that did not have a minimum wage above the current federal level of $7.25 per hour, then your annual income would be $15,080. Note: Only 18 states and the District of Columbia have minimum wage rates above the federal level of $7.25 per hour.

It has been interesting to review the State of Colorado’s minimum wage history which of course makes one think about the federal minimum wage rate as well. Neither minimum wage is able to provide a sustainable and respectful standard of living for just the day-to-day life basics such as housing, food, childcare. It’s a complex issue…not one to be resolved in this reporting. But it does make one think!

Source: Colorado Department of Labor and Employment, Division of Labor 
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