City Council passed an ordinance on Monday, June 20, 2022 to update several elements of Denver’s wage laws. The primary sponsor of the bill was Councilwoman Robin Kniech.
- The ordinance changed the time period used to calculate possible annual pay increases for the contractor minimum wage. Due to this change, the contractor minimum wage rate will be calculated in the same manner and take effect the at the same time as any change to the citywide minimum wage on Jan. 1 of each year.
- The Department of Finance will perform the calculation and will issue the decisions on potential wage rate increases.
- The Department of Finance uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
- The CPI-W is done by the Bureau of Labor Statistics. It measures the average change in prices over time of a “basket of consumer goods and services” commonly purchased by urban wage earners and clerical workers. This did not change with the new ordinance updates. The index is currently calculated based on prices in the Denver-Aurora-Lakewood area.
- The Department of Finance will compare the CPI-W from the first half of the prior year to the first have of the current year to determine how much wages might need to increase for the next year.
- Because Denver law requires an employer to comply with the highest applicable wage, both the contractor and citywide minimum wage are currently enforced at $15.87. Aside from a few exceptions, including tipped food and beverage workers, no one working in the city and county of Denver should be earning less $15.87.
- The ordinance aligned both the contractor and citywide minimum wages.
- Until now, the contractor minimum wage would increase on July 1 of each year. For half the year it might be higher than the citywide minimum wage and half the year it was lower and therefore did not apply. Now that the citywide minimum wage is consistently higher, the Denver City Council decided to align the timelines for both wage rates so there would only be one increase per year – the higher citywide minimum wage.
- The contractor minimum wage rate will not change on July 1, 2023. However, using the CPI-W calculation it still would have been lower than the citywide minimum wage anyway. As a result, City Council determined that doing the alignment would not keep workers from receiving the highest possible pay rate
- City Council approved a repeal of the obsolete living wage ordinance. The living wage was created in the 2000 but it is lower than both the contractor and citywide minimum wages.
- The updates added legally required details for collection of unpaid wages and fees/fines.
- The original ordinance gave our office the authority to send unpaid wages to collections and to assess fines for noncompliance with wage laws. However, some legal details were missing and our office has been unable to collect on behalf of workers.
- The updates align the collections provisions with the standard city collections processes.
- These changes include:
- Notice shall be sent via first class mail to the most recent mailing address of the employer; notice deemed complete seven days later.
- Penalties shall be due and payable 30 days after notice.
- Clarifying a late fee of $25 and a 10% annual interest on penalties not paid within 30 days.
- This will help our office recover significant amounts of restitution dollars from employers who were noncompliant with the wage law.
If you have questions about wage rates or which laws apply to you, do not hesitate to reach out to our office. Our analysts are happy to help. If you have questions about the changes to the ordinance, please reach out to Denver City Council. If you have questions about the next minimum wage rate increase and calculations, please contact the Department of Finance.