Colorado Minimum Wage 2025 – Rates, Laws & Compliance

Are you paying your Colorado team the correct wage in 2025? As of January 1, the Colorado minimum wage has risen to $14.81 per hour, a $0.39 increase from last year, while the tipped minimum wage is now $11.79 per hour.

But employers in Denver face even stricter rules, with a local minimum wage of $18.81 per hour (or $15.79 for tipped workers using the $3.02 tip credit). These differences can easily create payroll headaches, especially for businesses operating across multiple counties or with tipped staff.

That’s why it’s essential for business owners, HR managers, and payroll professionals to stay updated on Colorado’s evolving wage landscape. In this guide, we’ll break down Colorado’s 2025 minimum wage rates and what employers need to know about tipped wages, salary thresholds, service charges, tip pooling, and posting obligations.

Current Colorado Minimum Wage Rates (2025)

The minimum wage in Colorado is adjusted every year to keep pace with the cost of living, ensuring wages rise in line with inflation. For 2025, new rates have taken effect across the state, impacting both standard and tipped employees. Below, we’ll break down the current minimum wage rates in Colorado and highlight key differences you should be aware of.

What is Minimum Wage in Colorado?

As of January 1, 2025, Colorado’s statewide minimum wage is $14.42 per hour for non-tipped employees. This rate is nearly double the federal minimum wage of $7.25, highlighting Colorado’s ongoing effort to keep wages aligned with the rising cost of living.

For tipped workers, such as servers and bartenders, the minimum cash wage is $11.40 per hour. Employers may claim a tip credit of up to $3.02, provided that the worker’s tips make up the difference to reach the full $14.42 hourly rate.

The 2025 Colorado minimum wage increase is tied to inflation and CPI-adjusted minimum wage. This approach ensures that wages rise steadily over time, protecting workers’ purchasing power.

Historical Wage Chart (2015 – 2025)

Year	Colorado Minimum Wage	Federal Minimum Wage
2015	$8.23	$7.25
2016	$8.31	$7.25
2017	$9.30	$7.25
2018	$10.20	$7.25
2019	$11.10	$7.25
2020	$12.00	$7.25
2021	$12.32	$7.25
2022	$12.56	$7.25
2023	$13.65	$7.25
2024	$14.42	$7.25
2025	$14.42	$7.25

Over the past decade, Colorado’s minimum wage has increased by more than 75%, outpacing federal wage growth. This progressive adjustment reflects the state’s commitment to fair compensation and addresses the economic realities faced by workers in high-cost regions like Denver and Boulder.

Local Minimum Wage Laws in Colorado

Colorado is one of the states that allows local governments to set their own minimum wage rates above the state standard. This flexibility is critical because the cost of living varies significantly across different Colorado cities.

For example, living expenses in Denver or Boulder are much higher than in smaller cities like Pueblo or Colorado Springs. As a result, local governments have enacted higher wage rates to ensure workers can afford housing, food, and transportation.

Below is a breakdown of local minimum wages across major Colorado cities in 2025, along with compliance guidance for employers.

Denver Minimum Wage

Denver has been at the forefront of minimum wage reforms since voters approved Ordinance 20-1235 in 2019. As of January 1, 2025, the Denver minimum wage is $19.25 per hour, making it one of the highest citywide minimum wages in the country.

• Tipped workers: Employers may claim a tip credit of $3.02, meaning tipped employees must receive at least $16.23 per hour in direct cash wages. If the collected tips fall short, then it is the employer who must make up the difference.
• Annual adjustments: Starting in 2024, Denver’s wage rate is adjusted annually for inflation based on the Consumer Price Index (CPI).

Businesses operating in Denver must clearly display the Minimum Wage Denver Poster at the workplace and keep accurate payroll records. Violations can lead to penalties, back wages, and fines of up to $100 per day per employee.

Boulder Minimum Wage

Boulder implemented its first local minimum wage ordinance in January 2024, recognizing its high housing costs. In 2025, Boulder minimum wage is $15.70 per hour, which is $1.28 higher than the statewide rate of $14.42.

• Tipped employees: Employers must pay a direct cash wage of at least $12.68 per hour, with tips making up the rest.
• Exemptions: Boulder allows limited exemptions for small seasonal nonprofits and student employees under 18, though employers must confirm eligibility.

Boulder is a growing hub for technology and research jobs, but it also relies heavily on food service and hospitality workers. A higher wage ensures these workers can remain in the city despite rising living costs.

Edgewater Minimum Wage

Edgewater, a small city in Jefferson County, mirrors Denver’s minimum wage rates due to geographic and economic proximity. Therefore, in 2025, the Edgewater minimum wage is also $19.25 per hour (with a tipped wage of $16.23). Even small cafes or shops in Edgewater must comply with this rate, not the statewide one.

Colorado Springs Minimum Wage

Unlike Denver or Boulder, Colorado Springs does not have its own local ordinance and instead follows the statewide minimum wage of $14.42 per hour in 2025.

• Tipped wage: Employers may pay $11.40 per hour in direct wages to tipped employees, provided that tips bring their total earnings up to $14.42.
• Future potential: While no local ordinance exists yet, discussions among city officials and labor groups indicate that Colorado Springs may consider its own higher minimum wage in the future as housing prices continue to rise.

Pueblo Minimum Wage

Pueblo also defaults to the Colorado statewide minimum wage of $14.42 per hour in 2025.

• Tipped wage: $11.40 per hour in base pay for tipped workers.
• Economic note: Pueblo has a lower cost of living compared to Denver or Boulder, which is why the city has not pursued a higher local wage yet. However, advocacy groups are pushing for changes given inflation trends.

Which wage applies if multiple jurisdictions overlap?

A common point of confusion for both workers and employers is jurisdictional overlap. Colorado labor law makes it clear:

• The highest applicable wage always applies.
• Example: If a restaurant operates inside Denver city limits, the employer must pay the Denver minimum wage ($19.25) rather than the state rate ($14.42).
• Employers with multiple business locations must ensure compliance with each city’s rate.

Employees are always entitled to the most favorable minimum wage rate available in their jurisdiction. Employers who fail to comply face not only back-pay orders but also civil penalties, interest, and potential lawsuits.

Colorado Minimum Wage for Tipped Employees

Tipped workers, such as servers, bartenders, and hospitality staff, make up a significant portion of Colorado’s workforce. The state follows a tip credit system, meaning employers are allowed to pay a lower base wage to tipped employees as long as tips bring total earnings up to at least the full minimum wage. Misunderstanding or misapplying this rule can lead to costly penalties for businesses.

Current Tipped Minimum Wage

As of August 2025, Colorado’s statewide minimum wage is $14.42 per hour. For tipped employees, the law allows employers to take a maximum tip credit of $3.02.

• This means the cash wage (direct pay from the employer) for tipped workers must be at least $11.40 per hour.
• If an employee’s tips do not bring their total pay to at least $14.42 per hour, the employer is legally required to cover the shortfall.

Local Exceptions:

• In Denver, the tipped minimum wage is higher because the city’s local rate is $19.25. Employers there may still claim the $3.02 tip credit, so the cash wage is $16.23 per hour.
• Boulder and Edgewater follow similar rules with their own higher base rates.

How Tip Credits Work in Colorado

Minimum wage in co closely mirrors the Fair Labor Standards Act (FLSA) but includes additional worker protections:

1. Tip ownership: Tips are the property of the employee. Employers cannot keep or share in tips, though valid tip pooling among employees is allowed.
2. Tip credit limits: The employer can only claim up to $3.02 per hour as a credit. Even if an employee earns hundreds in tips, the base wage cannot drop below $11.40 statewide.
3. Recordkeeping: Employers must keep accurate records of wages and tips to prove employees are making at least the minimum wage.
4. Overtime pay: When tipped employees work overtime, the overtime rate is calculated using the full minimum wage ($14.42), not the reduced tipped wage.

Common Employer Mistakes with Tipped Wages

Despite clear rules, many employers make errors that result in wage violations, fines, and lawsuits. Some of the most frequent mistakes include:

1. Not covering tip shortfalls: If an employee’s tips are slow on a shift, the employer must still ensure their pay equals at least $14.42/hr statewide (or the higher local rate).
2. Illegal deductions: Taking deductions from tips (for credit card fees, uniforms, or breakage) is not allowed if it reduces earnings below minimum wage.
3. Improper tip pooling: Managers and supervisors cannot participate in tip pools under Colorado law.
4. Failure to adjust for local rates: Employers in Denver, Boulder, or Edgewater sometimes mistakenly pay only the state’s tipped wage instead of the higher local tipped wage.
5. Misclassification of employees: Some employers wrongly classify workers as “independent contractors” to avoid paying tipped minimum wage and overtime. This is a serious violation.

Youth & Training Minimum Wage in Colorado

Colorado law provides special considerations for minors under 18 and first-time workers in training roles. While the state generally aligns with federal Fair Labor Standards Act (FLSA) provisions, Co state minimum wage rules are stricter in certain areas to ensure fair pay and safe working conditions.

Rules for Minors Under 18

In Colorado, most minors under 18 are entitled to the full state minimum wage of $14.42 per hour (2025). However, there are a few exceptions:

• Student learners: High school students who work part-time in approved vocational or training programs may be paid as little as 85% of the minimum wage, which equals $12.26 per hour in 2025.
• Family employment: Minors working in a parent-owned business may be exempt from standard minimum wage laws.
• Agricultural workers: Youth employed in agriculture have slightly different pay rules under federal and state law, though most are still entitled to the state minimum wage.

Additionally, Colorado has strict age-based restrictions on certain job types (e.g., no hazardous occupations for workers under 18). Employers must carefully follow both state labor rules and federal child labor laws.

Training Wages for First-Time Workers

Colorado permits a training wage for new employees under specific conditions.

• Employers may pay 85% of the Co minimum wage 2025 to workers under the age of 20 during their first 90 consecutive calendar days of employment.
• After the 90-day training period, these workers must be paid the full minimum wage ($14.42/hr).
• This training wage cannot be applied to experienced workers rehired by the same employer, it is strictly for first-time entrants to the workforce.

The intent of this law is to encourage businesses to hire young, inexperienced workers while ensuring they quickly progress to full wages.

Hour Restrictions & Overtime Considerations

Along with wage rules, Colorado imposes work hour restrictions for minors to protect their education and health:

• 14-15-year-olds may not work more than 3 hours on a school day or 18 hours in a school week.
• During non-school weeks, they may work up to 8 hours per day and 40 hours per week.
• 16-17-year-olds have fewer restrictions, but still cannot work in hazardous jobs or during certain late-night hours if it interferes with schooling.

Overtime rules:

• If minors work more than 40 hours per week or 12 hours in a single day, they are entitled to overtime pay at 1.5x the standard minimum wage.
• Importantly, overtime is calculated on the full minimum wage ($14.42/hr), not the reduced training or student wage.

Special Minimum Wage Categories (Colorado COMPS Order)

While the statewide Colorado minimum wage 2025 is $14.42 per hour, certain categories of employees may be subject to special rules or exemptions.

Agricultural Workers

Agricultural employment has always been treated differently under both federal and state law. Colorado recently expanded protections for farmworkers, ensuring many are now covered by standard wage laws.

Weekly Overtime Rules for Agricultural Employees

• Unlike most workers who earn overtime after 40 hours in a week, agricultural workers in Colorado may qualify under different overtime thresholds.
• As of 2025, most agricultural workers are entitled to overtime pay after 48 hours per week, gradually reducing to 40 hours per week by 2027 (as part of phased reforms).
• Overtime pay is calculated at 1.5× the regular rate once the threshold is met.

Seasonal Agricultural Wage Considerations

• Small farms with limited annual payroll may be exempt from full minimum wage and overtime requirements.
• H-2A visa workers (temporary agricultural employees) must be paid at least the Adverse Effect Wage Rate (AEWR), which often exceeds the state minimum wage.
• Housing, meals, and transportation provided by employers cannot be deducted below legal minimums, ensuring workers still take home fair pay.

Employees with Disabilities

Colorado allows subminimum wages for workers with disabilities only under very limited circumstances and with approval under the Fair Labor Standards Act Section 14(c) program.

• Employers must obtain a certificate to pay less than minimum wage to workers with significant disabilities that affect productivity.
• However, this practice is being phased out nationwide, and many Colorado employers now pay workers with disabilities the full minimum wage to maintain compliance and avoid litigation.

Drivers and Driver Helpers

Employees in the trucking, delivery, and transportation industry are covered by special rules in the COMPS Order:

• Drivers who are subject to the federal Motor Carrier Act (MCA) are exempt from state overtime requirements.
• Minimum wage rules still apply, meaning drivers must earn at least $14.42 per hour in 2025 when averaged over their pay period.
• “Driver helpers,” such as delivery assistants who ride along with drivers, are generally covered by standard wage protections unless specifically exempt under federal law.

Seasonal and Nonprofit Workers

Certain seasonal and nonprofit roles may be exempt from Colorado standard wage laws, but Colorado maintains stricter standards than federal rules:

• Seasonal camps, outdoor recreation programs, and nonprofit youth programs may apply reduced wage structures, provided they meet COMPS exemptions.
• Nonprofits with very low annual revenue may qualify for limited exemptions, but most nonprofit employees must still be paid at least the state minimum wage.
• Volunteers (true unpaid positions) are not subject to minimum wage, but “volunteer” status cannot be used to avoid paying employees.

Exemptions under the Colorado Minimum Wage Law

Colorado recognizes several categories of employees exempt from both minimum wage and overtime under COMPS Order 39:

• Executive, administrative, and professional employees (paid on a salary basis and meeting duties tests).
• Outside salespersons who spend most of their time away from the employer’s location.
• Certain independent contractors who meet the strict criteria under Colorado labor law.
• Elected officials, volunteers, and some interns in government or nonprofit settings.

Employers must be extremely cautious when classifying workers as exempt; misclassification is one of the most common compliance violations and can result in heavy penalties.

Overtime Calculator Tool

To simplify Colorado minimum wage compliance, many businesses use an overtime calculator to determine pay accurately. While working overtime, it is advised that employers also vouch for work-life balance and compensate their employees properly. A Colorado overtime calculator allows workers and employers to:

• Input hourly wage, daily/weekly hours, and shift times
• Instantly calculate overtime pay owed under Colorado rules
• Compare results with federal overtime requirements
• Reduce errors and compliance risks

Colorado Minimum Wage Deductions, Credits, and Charges

Colorado law strictly regulates what deductions an employer can take from an employee’s paycheck and under what conditions credits (like meals or lodging) can be applied toward the minimum wage. These rules exist to protect employees from unfair pay practices while allowing employers limited flexibility for both net vs gross pay.

Allowed Deductions Under Colorado Law

Employers in Colorado can only make deductions that are legally permitted or voluntarily authorized by the employee in writing. It also includes considering the wage laws for both swing shifts and second shifts. Common allowable deductions include:

• Taxes and withholdings (federal income tax, state income tax, Social Security, Medicare)
• Court-ordered garnishments (such as child support or tax levies)
• Employee-authorized deductions (like retirement contributions, health insurance premiums, union dues, or charitable donations)

Importantly, deductions cannot reduce an employee’s wages below the applicable minimum wage unless explicitly allowed under state law.

For example, if an employee earns Colorado’s $14.42 minimum wage in 2025, their take-home pay after deductions must still reflect lawful, authorized reductions only.

Rules for Uniforms, Meals, and Lodging Credits

Colorado employers sometimes try to offset costs for uniforms, meals, or lodging. Here’s how state law applies:

Uniforms

• Employers may require employees to wear uniforms, but the cost cannot reduce wages below the minimum wage.
• If the uniform is a “special” one (logo-branded, specific style), the employer must pay for it.
• Standard clothing (black pants, white shirt) may be considered the employee’s responsibility.

Meals

• Employers may take a meal credit toward Colorado minimum wage, but only if:
  • The meal is voluntarily accepted by the employee.
  • It is provided at cost or less.
  • The credit does not push wages below the minimum wage.
• Example: If a meal costs $3, the employer may deduct that amount only with the employee’s agreement.

Lodging

• Lodging credits are allowed under strict conditions:
  • The employee must voluntarily accept the lodging arrangement.
  • The lodging must be for the employee’s benefit (not just the employer’s convenience).
  • The cost credited cannot exceed the reasonable market value or the state’s maximum lodging credit guidelines.

Employee Protections Against Unfair Deductions

Colorado’s Division of Labor Standards and Statistics (DLSS) enforces strict rules to prevent wage theft. Protections include:

• Employers cannot deduct for breakage, cash shortages, or damaged equipment unless the employee willfully caused the loss.
• Any deduction must be clearly disclosed to the employee in writing.
• If an employee disputes a deduction, the employer must provide proof of authorization.
• Retaliation against employees who question deductions or file a wage complaint is prohibited.

Employees who believe unlawful deductions were taken can file a wage complaint with the Colorado Department of Labor and Employment (CDLE), which may result in penalties for the employer.

Compliance & Employer Responsibilities

Employers in Colorado must follow strict compliance rules when it comes to the Colorado minimum wage, overtime, pay periods, and wage transparency. Failure to comply can lead to penalties, wage claims, or lawsuits. Below is a detailed breakdown of what every employer needs to know.

Minimum Wage Posting Requirements in Workplaces

Colorado law requires employers to display an official minimum wage notice in a conspicuous location where employees can easily read it, such as a breakroom, near time clocks, or other common areas.

• The notice must include the current state minimum wage rate and reference applicable local minimum wages (e.g., Denver, Boulder).
• Employers can download the official poster from the Colorado Department of Labor and Employment (CDLE) website.
• If employees work remotely, employers must provide the notice electronically (via company portal or email).

Non-compliance with posting requirements may lead to fines and wage disputes if employees claim they were not informed of their rights.

Recordkeeping and Payroll Transparency Rules

Colorado has strict payroll recordkeeping standards to ensure fair pay and transparency. Employers must:

• Maintain records of hours worked, wages paid, deductions, and credits for each employee.
• Keep payroll records for at least three years.
• Provide employees with itemized pay stubs that include:
  • Hours worked
  • Hourly rate or salary
  • Deductions (taxes, benefits, authorized withholdings)
  • Net pay

In addition, Colorado’s COMPS Order requires accurate records for overtime, tipped minimum wages, and any applicable local minimum wage.

Failure to maintain proper records shifts the burden of proof onto the employer in a wage dispute.

Employer Compliance Checklist (Step-by-Step Guide)

To stay compliant with Colorado minimum wage, employers should follow this step-by-step checklist:

1. Verify applicable wage rates: Check both state and local minimum wage laws (Denver, Boulder, etc.).
2. Update payroll systems: Adjust hourly rates, double time pay, overtime multipliers, and tip credits as needed.
3. Post required notices: Display the official Colorado minimum wage poster in the workplace and provide digital copies for remote staff.
4. Maintain accurate records: Track hours worked, overtime, tips, deductions, and credits for all employees.
5. Review meal, lodging, and uniform policies: Ensure credits and deductions comply with Colorado law.
6. Issue compliant pay stubs: Provide itemized details for every paycheck.
7. Train managers & supervisors: Make sure leadership understands wage laws to prevent misclassification or illegal deductions.
8. Audit payroll regularly: Conduct internal wage audits at least once a year to avoid violations.
9. Stay updated: Colorado adjusts minimum wage annually based on inflation, so employers must plan ahead for rate changes

Track Working Hours for Accurate Wage Calculation with Clockdiary

With the rising Colorado minimum wage rates, it has become more important than ever for employers to track employee working hours with precision. Proper tracking ensures employees are neither underpaid nor overpaid, helping businesses avoid costly compliance issues.

That’s where a powerful time tracking solution like Clockdiary proves invaluable. Here’s how it helps businesses run accurate payroll, protect employees, and simplify daily operations:

• Accurate clock-ins and clock-outs: Clockdiary automatically logs start and end times, eliminating guesswork and manual entry errors. This ensures employees are paid fairly for every minute worked.
• Overtime detection and compliance: The software instantly flags when employees exceed 40 hours per week, ensuring overtime pay is calculated correctly without manual effort.
• Break management and classification: Clockdiary records break durations accurately, differentiating between paid short breaks and unpaid meal periods, preventing wage miscalculations and compliance risks.
• Timesheet audits and transparency: A complete timesheet history is stored and easily accessible, allowing managers to review, approve, and resolve disputes quickly. This fosters trust while keeping records audit-ready.
• Seamless payroll integration: Detailed work-hour reports can be exported directly into payroll systems like QuickBooks or ADP, streamlining wage calculation and reducing manual data entry errors.