Denver Raises Minimum Wages for City Contractors
The Denver City Council has passed an ordinance that incrementally raises the minimum wage for workers employed by city contractors and subcontractors to $15 an hour by 2021. As described below, the ordinance covers a broad range of contractors and in some cases applies to contracts signed before the ordinance was passed. City contractors should review their contracts for language indicating whether they are bound by changes in the law, and are encouraged to contact an attorney with questions.
Who is covered? The wage increase applies to a wide range of workers under city and airport contracts, including concession, catering, maintenance, ramp and cargo, hospitality, security, ticketing agent, baggage handling, parking lot operations, passenger transportation, cab starter, towing, and passenger handling service workers.FN1
What is the new minimum wage? Workers under covered city contracts must be paid at least $13 an hour by July 1, 2019; $14 an hour by July 1, 2020; and $15 an hour by July 1, 2021.FN2 (Colorado’s current minimum wage is $11.10.) Contractors covered by higher prevailing wage requirements must pay the greater wage rate.FN3
Can contractors offset tips? Contractors may offset minimum wages by up to $3.02 per hour in tips, for tipped employees FN4
Does the wage increase apply to pre-existing city contracts? It may. The increases apply to contracts signed after March 11, 2019 and to contracts signed before March 11, 2019 that explicitly require the contractor to comply with changes in the law.FN5
Does the wage increase apply to smaller contracts and small employers? The ordinance does not apply to (1) contracts for less than $50,000 or (2) small businesses that employ 25 or fewer employees with contracts less than $500,000.FN6
What are the penalties for non-compliance? Penalties for first-time violations are $50 per day per worker, less minimum wage, and penalties increase to $100 per day and an additional $5,000 fine.FN7 The city may also withhold payments, suspend services, or terminate a contract to resolve compliance issues.
Can contractors negotiate the effect of the changes? City agencies have been tasked with opening negotiations with contractors whose contracts are immediately impacted and to amend existing contracts that are not immediately impacted.
FN1: Ord. 163-19, codified at D.R.M.C. § 20-82(c)(2).
FN2: D.R.M.C. § 20-82(c)(2).
FN3: D.R.M.C. § 20-84(c).
FN4: D.R.M.C. § 20-82(c)(3).
FN5: D.R.M.C. § 20-84(b).
FN6: D.R.M.C. §§ 20-82(d) 20-84(e);
FN7: D.R.M.C. § 20-83(b)