Blog

House Committee Advances Local-Option Minimum-Wage Increase Bill

The House Transportation and Local Government Committee this afternoon amended and approved HB 1210, a bill that would allow local governments to unilaterally increase the minimum wage above that of the state minimum wage.

The committee adopted an amendment that allows a county and the municipalities within the county to enter into an intergovernmental agreement concerning an increase in the minimum wage.

The amended bill was approved on a 6-to-5 vote and sent to the House Floor for Second Reading Debate.  Democrat Representative Don Valdez (La Jara) joined the Committee’s four Republicans to oppose the bill.

The House co-sponsors are Representatives Jovan Melton (D-Aurora) and Rochelle Galindo (D-Greeley).

The Colorado Chamber opposes the bill as introduced, as it opposed similar measures that were proposed in the 2015 (HB 1300) and 2018 (HB 1368) legislative sessions. However, it will continue to persuade legislators to amend the bill to address its concerns.

The bill’s Fiscal Note, prepared by non-partisan legislative staff, provides a summary and background of the introduced measure:

Summary of Legislation

Current state law prevents local governments from enacting minimum wage laws separate from those of the state.  This bill repeals that provision and allows local governments to establish minimum wage laws for individuals performing work while physically present within their jurisdictions through their governing body, an initiative, or referendum.  Local minimum wages may exceed the state and federal minimum wages.  A local government that establishes a local minimum wage may adopt provisions for local enforcement of the minimum wage law.

The authority to enact a local government minimum wage applies to a city, home rule city, town, territorial charter city, city and county, county, and home rule county.

Background

Colorado’s minimum wage.  Prior to 2007, Colorado’s minimum wage law was set by federal law. In 2006, Colorado voters approved an amendment to the state constitution that raised the minimum wage from $5.15 per hour to $6.85 per hour beginning in 2007, and from $2.13 per hour to $3.83 per hour for tipped workers.  In 2016, Colorado voters again amended the state constitution to increase the state minimum wage from $8.31 to $9.30 per hour beginning on January 1, 2017, after which it increases annually by $0.90 per hour until it reaches $12.00 per hour on January 1, 2020.  Beginning January 1, 2021, it will be adjusted each year thereafter by the increase in the Consumer Price Index.  The federal minimum wage is currently set at $7.25 per hour, and $2.13 for tipped workers.

Loren Furman, Colorado Chamber Senior Vice President, State and Federal Policy, testified against the proposal.  Here’s an edited version of Loren’s prepared testimony:

In hearing just today about amendment L001, I will be bringing that amendment back to our members for them to review because I believe that it will be good step in the right direction;

I’m mystified as to why we need this bill.  Colorado is going to have one of the highest minimum wage rates in the country once the 2018 ballot measure goes into effect on January 1, 2020.

We should really think about how that will impact businesses first before we consider such a complicated bill as HB-1210.

First, I want to raise the issue of compliance.  Many of you have heard me complain plenty about the nightmare that businesses are experiencing with multi-jurisdiction tax compliance.

This situation is no different in my mind.  Allowing 64 counties and 272 municipalities the ability to set their own minimum wage for employers in their jurisdiction is going to cause a ridiculous amount of complications for businesses.

Let’s start with the likelihood of a worker employed for one company but who changes shifts in different jurisdictions around the State?  How does a business know what to pay that worker who is moving around?

Or, let’s use the example of an Outback steakhouse.  Outback has locations in several different cities.  What is stopping a worker from quitting his or her job in Denver and going to work in Aurora because the wage is higher?  The restaurant has no control over the decision of the city or county in that situation to increase the minimum wage and loses that employee.

Second, let’s talk about the enforcement provisions of this bill.  I have worked with a lot of cities and counties over the years that want to partner with businesses that operate and create tax revenue in their jurisdictions.

This enforcement language, however, is not coming from the cities and counties.  This legal enforcement language has been added not just in this bill but to multiple bills being introduced this Session.  It’s blatantly obvious why:  so more lawsuits can be filed against businesses.

Setting hundreds of new wage rates, and increasing compliance complications for employers, especially for smaller firms, through this bill will result in many of them unintentionally getting it wrong.

The compliance language will create higher litigation costs not just for employers but for workers, and how will a worker know where to go to with a complaint?

Does the employee use the state administrative process through Colorado Department of Labor and Employment?  The city’s administrative process?  A county’s administrative/legal remedies?  Or does the worker just file a lawsuit in court as this provision of the bill is clearly encouraging?

In the end, when we see this type of language adopted, it’s the lawyers that end up getting paid–and not the workers who this bill is intended to help.

I encourage you to either vote NO on this bill or improve this bill dramatically by adopting amendment L001 and removing the draconian legal remedies contained in the introduced bill.

For More Information

Colorado Chamber members with questions about HB-1210 should contact Loren at 303.866.9642.  The Chamber created a fact sheet that was distributed to the Committee members prior to the hearing.  The Chamber also joined the Colorado Restaurant Association, the Colorado Retail Council and the Tavern League of Colorado in producing a joint fact sheet to be distributed to Committee members.

News Media Coverage

Colorado Democrats bring back twice-killed bill to allow cities, counties to raise minimum wage,” by Ed Sealover The Denver Business Journal, February 25th.

Colorado Democrats seek to let Denver, other cities raise their minimum wage,” by Anna Staver, The Denver Post, February 25th.