What Does the Passage of HB25-1208 Mean for Restaurant Workers?

HB25-1208 is finally law. After months of heated debate and multiple rounds of legislative revisions, Colorado’s controversial tipped wages bill was signed last week by Governor Jared Polis — but big questions remain about how cities like Denver and Boulder will respond.

The final version of the bill that landed on the governor's desk keeps the existing $3.02 tip offset intact statewide, but gives local governments the power to raise the tip offset higher when increasing local minimum wages. Previous iterations of the bill attempted to legislate absolute thresholds and set increases in the tip offset across the state, but bill sponsors Representative Steven Woodrow and Alex Valdez ran into stiff resistance.

As a last-minute compromise to get the bill past the House Finance committee, they simplified the proposal to the current format. By doing so, they retained the support of industry groups like the Colorado Restaurant Association, EatDenver, Hispanic Restaurant Association, Colorado Chamber of Commerce, Downtown Denver Partnership, Downtown Boulder Partnership and the Tavern League, and flipped stakeholders such as Matthew Fritz-Mauer, executive director of Denver Labor at the Denver Auditor's Office.

Fritz-Mauer, whose office is responsible for creating and implementing procedures and policies to investigate, address and prevent wage theft in the City and County of Denver, was opposed to the original version which he believed would have resulted in a sudden wage cut for tipped workers — up to $4 an hour overnight. “We do wage enforcement, but it’s anti-poverty work. And so we looked at this bill and saw an across-the-board wage cut for low-income people. It would have exacerbated poverty and economic insecurity,” he says.

Another point of contention was that the Auditor’s Office was not consulted in the drafting of the bill, despite the bill directly affecting their enforcement work. “We’ve spent years, we’ve spent an extraordinary amount of money and time and energy…educating people about the minimum wage and about the tip credit. And so if it suddenly changed overnight, it would have caused a lot of problems and we also thought that it would’ve just led to more minimum wage violations,” explains Fritz-Mauer, pointing out that restaurants and bars are the second-most likely industry for such violations in the greater Denver area.

Other entities within Denver’s government, such as the Mayor’s Office and the Department of Economic Development and Opportunity, supported the proposal. The Auditor's Office operates independently to ensure accountability and transparency in city operations, including enforcing labor laws, but after the sponsors promised the local control compromise amendment, Fritz-Mauer dropped his opposition calling it a “win for workers.”

Many similar unions and labor groups followed the same path. But not all: One Fair Wage, led by Saru Jayaraman, which advocates for tipped employees to receive a full minimum wage, opposed the compromise, saying it allows restaurant owners to pay their workers less than a living wage. But its voice wasn’t strong enough to stop the bill from becoming law.

“This bill is an important first step in addressing this issue and ensuring that restaurants across Colorado can thrive,” said Polis in his signing statement. “With this new legislative tool, I call on local governments in Denver, the City of Boulder, Edgewater and unincorporated Boulder County to take action to address the tip credit and ameliorate pay disparities between front- and back-of-house workers.”

To explain: broadly back-of-house workers are paid the regular minimum wage while front-of-house workers are paid the tipped minimum wage. But the theory is that the average tipped worker makes much more than $3.02 per hour—they take home twice, sometimes three times what their back-of-house counterparts make. Now that local governments have the power to increase that tip offset, they can raise the regular minimum wage and the tip offset so that only back-of-house workers (and other untipped minimum wage workers) get a raise. The question of if the minimum tipped wage will decrease or increase is wholly dependent on the details if these local governments do decide to take action.

So will they?

“This will be a political decision for our City Council, and it is inappropriate to speculate on how Boulder will respond,” says Shannon Aulabaugh, communication manager for the City of Boulder. Denver Mayor Mike Johnston’s office, which supported the legislation, says it's too early to know if the city will do as Polis suggests. But some Denver councilmembers are already lining up to fight increasing the tip threshold.

So this hot issue doesn't show signs of cooling down anytime soon.