DENVER Starting Jan. 1, tens of thousands of workers in Denver will see more money in their paychecks as the citys local minimum wage increases to $19.29 an hour, with eligible tipped workers earning at least $16.27.The 2.56% i ncrease from 2025s rates is part of a 2019 ordinance tying annual wage adjustments to the Consumer Price Index. City officials say the goal is to protect low-wage workers from falling behind as inflation raises the cost of living. Denver Auditor Timothy M. OBrien calls it an important milestone and says the adjustment helps reduce the harms of poverty, including eviction and hunger, and strengthens Denver as a place to work, live, and do business. But for small businesses, the change could mean more than just updating payroll.At Elemental Bakery Coffeehouse, owner Cindy Wright said labor costs are already her biggest expense.Our front of the house is tipped. In our back of the house, its not tipped, Wright said. We were in the process of maybe hiring another baker, but then it makes you stop and think: Can we hire at the new minimum wage? Wright told Denver7 that competition for skilled staff is fierce and that higher wages can help attract talent.Everyones trying to hire the same people, she said. So maybe to get good people, you want to be able to provide them with a really good benefits package.Elemental barista Karson Hallaway said the wage bump adds to a job he already values for its strong team and customer community. With tips included, Hallaway said he makes between $25 and $28 per hour.I do feel stability enough to get my ducks in order and transition careers when its right, Hallaway said. Its security Im able to loosen up and connect with the guest on a much more genuine level, because I feel safe enough in the city that Im working in and living in.Not all business groups are celebrating. The Colorado Restaurant Association estimates the increase will cost Denver restaurants an average of $70,468 in additional labor expenses in 2026 more than 37% higher than last years increase.It feels like death by a thousand costs for restaurants right now, said Nick Hoover, the groups director of government affairs, citing a 6.7% drop in local restaurant spending from 2024.The Auditors Office says wage enforcement remains a priority after recovering more than $2.3 million in unpaid wages last year and enforcing the rights of 7,200 workers.Despite the higher costs, Wright said paying fairly and offering benefits shows employees they are valued and that happy, well-paid staff can strengthen the business.Hallaway agreed, adding, We just cultivate community and we get people coming back.Wright says even after the wage hike, she doesn't expect to raise prices for customers. Denver's minimum wage rising to $19.29 on Jan. 1, 2026; businesses brace for changes ...read more read less