What Denver Employers Actually Need to Do Before Colorado's Minimum Wage Goes Up January 1
The new rate gets announced in November, but the payroll, posting, and tipped-employee work starts now. A step-by-step guide for the owner running their own HR.
The new rate gets announced in November, but the payroll, posting, and tipped-employee work starts now. A step-by-step guide for the owner running their own HR.
Colorado’s 2027 minimum wage goes into effect on January 1, 2027. That date is fixed. The specific dollar figure won’t be published until the Colorado Department of Labor and Employment announces it in approximately November 2026, calculated from the Consumer Price Index for Urban Wage Earners and Clerical Workers under Amendment 70. When CDLE posts the number at cdle.colorado.gov, this article will be updated.
What won’t change when the number drops is the work that Denver employers need to have mostly finished by then. Payroll software review, tipped-employee math, notice posting, and Fair Work Week schedule coordination take weeks. October — after the November announcement — is the last realistic window to work through them without cutting corners.
This piece walks through each in the order you actually need to do them.
As of 2025, Colorado’s state minimum wage is $14.81 per hour and Denver’s local minimum wage is $18.29 per hour. The 2027 figures will be announced by CDLE in November 2026. Denver employers must apply whichever rate is higher. Denver’s local rate has exceeded the state floor every year since 2020, which means Denver employers are governed by Denver’s rate, enforced by the Denver Office of Human Rights — not CDLE.
The Two Rates Denver Employers Are Required to Track
Most Denver small-business owners who search for Colorado wage information find only the state number and assume that’s all they need. It isn’t. The Colorado state minimum wage is a floor. Denver has its own minimum wage ordinance, administered and enforced by the Denver Office of Human Rights, not the Colorado Department of Labor. Any business with employees performing work within Denver city limits is subject to Denver’s local rate. The two agencies run parallel enforcement processes. CDLE handles state violations; Denver OHR handles local ordinance violations. An employer can be out of compliance with one while compliant with the other.
In practice: an employer who correctly updates their payroll system to the new Colorado state rate in January but misses Denver’s higher local rate is still out of compliance on January 1. That gap is entirely avoidable, and it costs real money.
Denver’s local wage rate is published at denvergov.org/OHR. The 2025 Denver rate is $18.29 per hour — $3.48 above the current state floor. That gap has been consistent. When the 2027 state figure is announced, Denver’s 2027 figure must be confirmed separately. The rule is simple: if your employees work in Denver, find the Denver rate, confirm it’s higher than the state rate, use it, and verify your payroll software is applying the Denver number rather than the state one.
Tipped Employees in Colorado and Denver: What the Cash Wage Actually Is
Colorado has a tip credit mechanism under the Colorado Overtime and Minimum Pay Standards Order — the state’s primary wage regulation, updated annually by CDLE. Employers of tipped employees may pay a reduced cash wage. That cash wage, combined with tips the employee actually received, must equal or exceed the applicable minimum wage for every hour worked. The tip credit is currently approximately $3.02 per hour, making the minimum cash wage for tipped employees approximately $11.79 per hour at the state level.
Denver restaurant operators frequently miss what comes next. When Denver’s higher local minimum wage applies, the math runs against that higher floor, not the state’s. A tipped employee working in Denver must receive a cash wage that, when combined with actual tips, meets or exceeds Denver’s local minimum. With Denver at $18.29 in 2025, the employer must verify each pay period that tips plus cash wages equals at least $18.29 for every hour worked. If tips fall short, the employer pays the difference in cash. Not optional.
Here’s what that looks like for a real employer. Say you run a ten-person front-of-house team at a Colfax restaurant. You pay servers $15.27 per hour as their cash wage. A server has a slow Tuesday lunch — tips bring their effective hourly rate to $17.10. You owe them an additional $1.19 per hour for those hours. You have to document that calculation per employee, per pay period: cash wage paid, tips reported, total compared against the Denver minimum. That’s the record an auditor requests first.
Keep a weekly or biweekly tip reconciliation log for each tipped employee. Hours worked, cash wage, tips reported, effective total. When CDLE announces the 2027 rate, recalculate your cash wage floor against the new Denver local rate and re-run your reconciliation template before January 1.
The October Through December Payroll Software Countdown
CDLE publishes the new rate in November, which gives Denver employers six weeks or so before January 1. That sounds adequate until you map it against actual payroll software processes and pay-cycle deadlines. It goes faster than you think.
Log in to your payroll platform the day the November announcement drops and find the minimum wage rate field. Don’t assume the platform will auto-update with the correct Denver rate.
In ADP Run, the rate-change setting is in Company Settings under Pay Rates — confirm the system is applying your municipality’s local rate, not just the state rate. In Gusto, the platform sends an alert when state minimum wage changes are detected, but updating individual employee base rates to meet Denver’s local minimum is a manual step in each employee’s profile. The alert does not do it for you. In QuickBooks Payroll, the auto-update function typically populates the Colorado state rate; the Denver local override requires a separate manual entry under the employee’s payroll detail. A payroll that looks compliant in QuickBooks may be producing paychecks at the state rate without flagging anything until someone files a complaint.
Verify the actual rate your software will apply by running a test payroll calculation before any live checks go out.
By mid-December, lock in your pay-cycle math. If your biweekly cycle ends December 26, hours worked January 1 through 3 will land on that check even if it’s issued in early January. Those hours must be calculated at the 2027 rate. Either split the pay period — 2026 rate for pre-January hours, 2027 rate for January hours on the same check — or, cleaner, align your cycle so the new period begins January 1.
Call your payroll processor’s support line in November. ADP, Gusto, and QuickBooks all have compliance support. The November call takes twenty minutes. The January call, when you’re correcting checks that already went out, takes most of a morning and involves a lot more paperwork.
Before December 31, pull one test calculation for each employee type: hourly non-tipped, tipped, salaried exempt. Confirm the rate. Save the result with a date on it. If something goes wrong in January, a dated December 31 verification establishes good-faith compliance. “I thought it was fine” doesn’t.
Where the COMPS Poster Must Actually Hang
The COMPS Order notice — not a generic minimum wage poster, the current-year COMPS Order notice from CDLE — must be physically posted in a conspicuous location at each worksite where employees can readily read it. Break room, time-clock area. The manager’s back office doesn’t satisfy the requirement, even if it technically has a wall.
The updated 2027 COMPS Order notice will be available from CDLE’s website in December 2026. Download and post it in early December.
If 10 percent or more of your workforce speaks a language other than English primarily, you’re required to post in that language as well. CDLE provides a Spanish-language version on the same page as the English version. If your restaurant staff is predominantly Spanish-speaking, both posters go up at the same time.
Remote and hybrid employees who never come to a physical worksite are entitled to electronic notice. Email them the COMPS Order notice by January 1. A poster in an office no one visits doesn’t cover remote workers — which seems obvious but shows up in audits more than you’d expect.
One additional Denver-specific note: Denver OHR wage posting is a separate document from the CDLE COMPS notice. Some employers need both on the wall. Check the Denver OHR website and confirm before January.
Fair Work Week Employers: Your December Schedule Is Also a Wage Document
Food and beverage establishments and retail employers covered by Denver’s Fair Work Week ordinance face an additional wrinkle that gets missed every year. Confirm your coverage threshold directly with Denver OHR — it has been subject to change.
If your business is covered, here’s the problem: when you post your December 18 schedule and it runs shifts through January 3, those January 1, 2, and 3 shifts are wage documents. Employees can reasonably rely on them. If those shifts were calculated at the 2026 rate when January 1 hours should reflect the higher 2027 rate, you have exposure under both the wage ordinance and Fair Work Week’s good-faith scheduling requirements.
The fix is straightforward. When you post December schedules covering January shifts, calculate the January hours at the new rate. If the announcement comes late in November and you’re already into your December scheduling cycle, revisit any posted January shifts and update them. For new hires starting in late December, the Fair Work Week good-faith estimate of hours should reflect the 2027 wage rate if the start date is January 1 or later.
Denver OHR handles Fair Work Week questions, not CDLE. They have a dedicated compliance line and have published guidance on the ordinance’s interaction with wage changes. Call them directly.
The Exempt-Salary Threshold Nobody Checks at Minimum Wage Time
The COMPS Order also sets the salary threshold below which a salaried employee cannot be classified as exempt from overtime. That threshold adjusts annually alongside the minimum wage. The 2025 reference figure is $1,086.25 per week, or $56,485 per year. The 2027 figure will be published with the rest of the COMPS Order update in November 2026.
Here’s the specific risk. You have a salaried shift manager classified as exempt — no overtime regardless of hours worked. Their salary is at or near the current threshold. If the 2027 threshold rises above their salary, they lose the exemption on January 1 and become overtime-eligible from that date forward.
Wage claims built on misclassified-exempt employees are among the most common CDLE complaints, and a January threshold increase is a recurring trigger. I find this one genuinely underappreciated. Employers do the payroll work, post the posters, update the tipped-employee math — and then completely miss that their salaried manager just lost their exemption. For most small Denver businesses, this is a one-or-two-person review. Pull the salary records for any salaried exempt employees. Compare them against the 2027 threshold when it’s announced. Decide before January 1 whether to raise the salary to maintain the exemption or reclassify the employee as hourly with overtime eligibility.
Don’t wait to see what happens. An employee who is legally non-exempt from January 1 and gets paid as exempt through February has two months of overtime claims building before anyone catches it.
What a Denver Worker Is Actually Owed
If you’re an employee reading this: your applicable minimum wage is whichever is higher — the Colorado state rate or Denver’s local rate if you work within city limits. As of 2025, that’s $18.29 per hour for Denver workers. The 2027 figure will be announced by CDLE in November 2026 and takes effect January 1, 2027.
If your January paycheck reflects the old rate, raise it with your employer first. Payroll errors happen — not every underpayment is intentional — and most employers will correct a documented mistake without a formal complaint. If they don’t, you can file a wage complaint with Denver OHR for a local ordinance violation, or with CDLE for a state violation. Both agencies investigate at no cost to the employee.
Colorado law also gives you a private right of action — you can file a civil lawsuit without going through an agency first. Under the Colorado Wage Claim Act, employees who prevail are entitled to attorney’s fees and court costs on top of unpaid wages, which means an attorney may take a legitimate claim on contingency. For a small, recent error, the agency complaint route is usually faster and free. If the violation was ongoing, talk to an employment attorney before deciding how to proceed. Denver’s small claims court process is also worth understanding for documented underpayments within its dollar limits.
What Happens If You Miss January 1
CDLE’s enforcement process for wage violations typically begins with a complaint from an employee. The initial step is informal resolution — CDLE contacts the employer, identifies the underpayment, establishes a corrective plan. Employers who self-correct quickly and cooperate generally face lower penalties than those who don’t. That’s not just advice; it’s how these investigations structurally play out.
Under the Colorado Wage Claim Act, penalties for unpaid wages can reach 125 percent of the unpaid amount on top of the wages themselves. An underpayment of $2,000 across your staff generates potential penalty exposure of $4,500. Denver OHR has separate enforcement authority and can impose its own civil penalties alongside any CDLE action.
If you find mid-January checks at the wrong rate, the right move is to contact CDLE before an employee complaint arrives. Calculate the total underpayment. Document it. Call CDLE directly. Their informal resolution process doesn’t eliminate liability, but it typically produces lower penalties than a complaint-driven investigation.
Waiting to see whether anyone notices is not a strategy. Employees notice.
Before You Finish Reading This
The 2027 Colorado minimum wage rate will be set by CDLE in November 2026. Denver’s local rate will be confirmed separately by Denver OHR and published at denvergov.org/OHR. Denver employers must apply whichever is higher. Based on every year since 2020, that will be Denver’s rate.
The November announcement is your start gun, not your finish line. Payroll software verification, tipped-employee reconciliation setup, COMPS poster, salaried-exempt threshold review — all of it needs to be done before December 31. Start in November and it’s a manageable six-week project. Start December 28 and you’re making mistakes under pressure while your staff is waiting on correct paychecks. I’ve seen what that scramble looks like from the outside. It produces compliance problems that didn’t have to exist.
This article is part of our business and professional coverage of the regulations and costs shaping Denver’s employer landscape.
CityDesk Denver will update this article with the confirmed 2027 state and Denver wage rates the day CDLE publishes them. For CDLE information: cdle.colorado.gov. For Denver OHR wage compliance: denvergov.org/OHR.
If you’re a Denver restaurant or retail operator and want to share how you’re handling the 2027 rate change, contact us at [editorial address]. On-record sources are preferred; we’ll note if a source isn’t identified by name.
