After  the recent passage of a new wage law in Colorado, city councils across the state are clamoring to raise wages above the new state minimum, which is higher than the federal minimum wage. The changes are controversial, as they come at a time when the economy is struggling.

There are two basic laws that determine the minimum wage and overtime pay of employees in Colorado. The federal law, the Fair Labor Standards Act, lays out guidelines such as an hourly minimum wage of $7.25. The FLSA defines work that exceeds 40 hours per week as overtime, and overtime pay as at least one-and-a- half-times the regular pay rate.

The new state wage law, Colorado Overtime and Minimum Pay Standards Order #36, was passed in March 2020 and expands these federal requirements with a raise of the state minimum wage to $12 per hour. Overtime pay is one-and-a-half-times the regular rate and is for hours exceeding 40 hours per week, 12 hours per workday, or 12 consecutive hours, excluding meal breaks. It further expands the calculation of overtime hours to include bonuses, tips and commissions in the hourly rate.

Cities raise base wage above state law minimum

Colorado cities are following the trend toward higher pay. While the Denver City Council unanimously passed its three-tiered minimum wage law in November 2019, before the economic downturn, other growing cities are now proposing measures that address not only increased cost-of-living challenges for minimum wage earners, but also the difficulty of providing affordable housing.

The Aurora City Council’s proposed minimum wage plan is even more ambitious than Denver’s. It seeks to raise the city’s minimum wage to $20 by 2027.

Proponents of the minimum wage hikes say they are needed in urban areas that are experiencing cost-of-living increases along with rapid population growth and economic expansion. Critics say the proposals are unworkable at a time when the economy is in crisis.

Keeping up with wage law changes and employment law is crucial in these uncertain times. Employers should understand their obligations and workers should know their rights.