Starting January 1, 2014, the minimum wage in Colorado will most likely rise from $7.78 to $8.00 while the minimum wage in Montana will rise from $7.80 to $7.90.
Like eight other states, Colorado and Montana make annual adjustments to their minimum wage rates to keep pace with the rate of inflation.
Colorado and Montana each use a different index to measure the rise in the cost of living, which accounts for the 12-cent difference in their increases. Colorado ties its minimum wage to the Consumer Price Index for All Urban Consumers for the Denver-Boulder-Greeley metropolitan area (which had increased 2.8 percent from the first half of 2012 until the first half of 2013). Montana, on the other hand, adjusts its minimum wage based on the U.S. City Average Consumer Price Index for All Urban Consumers for All Items (which had increased 1.5 percent from August 2012 to August 2013) and then rounds the resulting rate to the nearest five cents.
Colorado allows employers to pay a lower minimum wage rate to tipped employees as long as their tips cover the difference between the lower minimum wage rate and the normal minimum wage rate. This minimum wage for tipped employees is expected to go up from $4.76 per hour to $4.98 per hour. Montana does not have a lower minimum wage for tipped employees.
The Colorado figures are based on a Minimum Wage Order proposed by the Colorado Department of Labor & Employment. A public hearing on the proposed order will be held in Denver on November 1. Employers can comment on the proposed order by mail, fax or email through November 5; details are available at the department website.