Colorado Local Minimum Wage Tip Offset Update for 2026 - HR ALERTS

Colorado Local Minimum Wage Tip Offset Update for 2026

Effective: January 1, 2026

Beginning January 1, 2026, Colorado cities and counties will have new authority to set their own minimum wage and tip offset rules. Employers with tipped workers should review pay practices now to ensure compliance across jurisdictions.

What the Law Allows Starting January 1, 2026

• Local governments may set a higher minimum wage than the statewide rate.

• Current state law requires a tip offset of $3.02 (tipped employees may be paid $3.02 less than the local minimum wage).

What Changes in 2026

• Local governments may choose to increase the tip offset above $3.02.

• A higher offset cannot reduce a tipped employee’s base wage below:

  State minimum wage minus $3.02

What This Means for Employers

Employers with locations in more than one city or county will see more variation in wage rules. You must ensure:

• Correct tip offsets by jurisdiction

• Payroll systems updated to match local rules

• Updated wage posters and employee communications

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Get day-to-day updates on Colorado Local Minimum Wage Tip Offset Update for 2026 visit the Vida HR Knowledge Center (Vida HR Clients Exclusive).