United States: New Edgewater, Colorado Minimum Wage Ordinance Highlights Compliance Challenge

The Colorado locality of Edgewater—which borders Denver and has a population of around 5,000—has enacted its own local minimum wage ordinance, which takes effect January 1, 2024. The new law demonstrates how challenging multi-jurisdiction compliance can be for employers.

Since 2020, Colorado law has allowed local governments to enact their own minimum wages, but to date, Edgewater is only the second jurisdiction to do so after Denver. State law limits how many localities can enact such ordinances—up to 10 percent of local governments—so Colorado could never reach California's number of minimum wage ordinances, but minimum wage compliance in Colorado is poised to become even more challenging as more laws take effect.

Edgewater's ordinance applies to employers with one or more "covered" employees, which are individuals performing, or expected to perform, four or more hours of work for an employer in any given week in Edgewater. For employers without a physical location in Edgewater, but who might send employees to perform work in the city, the ordinance does not address how employers track, or employees demonstrate, work "in" Edgewater. Unlike some other local jurisdictions with a minimum wage ordinance, on its webpage for the ordinance the city does not provide a map or tool to help. Moreover, based on an informal conversation with Littler, city officials have no current plans to release such a resource.

Beginning January 1, 2024, employers must ensure covered employees are paid not less than the minimum wage. For food and beverage workers, however, employers may claim a tip credit of up to $3.02 per hour based on tips regularly and actually received by such an employee. The ordinance establishes pre-set rates for 2024 through 2028.

Beginning in 2029, and each subsequent calendar year, the minimum wage will be set by the city council based on increases in the Consumer Price Index (CPI) for the Denver-Aurora-Lakewood Area. Alternatively, if the local minimum wage rate in Denver exceeds Edgewater's CPI-adjusted rate, the new Edgewater minimum wage will match Denver's (currently $17.29 per hour and set to be CPI-adjusted on January 1, 2024 and each subsequent calendar year).

Employers must post, in a place that is prominent and easily accessible to employees, notice of the current minimum wage. Although the ordinance does not expressly require employers to use a city-created notice, it does specify that any notice an employer does use must include the following language:

Additionally, employers must keep payroll records that demonstrate compliance with the ordinance for at least three years. Employees alleging a violation can either file a complaint with the city or a civil lawsuit. Notably, the ordinance says that it does not preclude an individual from filing or pursuing a complaint with the Colorado Department of Labor and Employment in addition to filing, pursuing, or participating in any enforcement action the ordinance authorizes.

Employers with Colorado operations might now have an additional box they need to check when reviewing their Centennial State compliance obligations. For businesses operating in multiple jurisdictions – whether they have locations in a single state, multiple states, or nationwide – the Edgewater ordinance is a reminder that ensuring compliance companywide requires knowing about, and complying with, applicable laws enacted at all levels of government (federal, state, local), big or (in this case) small.

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