Business/Technology Reporter
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A major compromise by the restaurant industry and their advocates got a controversial bill passed by a state House committee late Friday.
Their effort to change how tipped workers, like restaurant servers, are paid in areas where the local minimum wage is higher than the state’s, will be left to local governments, in an amendment that helped House Bill 1208 get approved by a vote of 11-2.
“If the mark of a good compromise is that both sides leave dissatisfied, then Amendment L.018 is a total banger,” said Rep. Steven Woodrow, a Denver Democrat and the bill’s prime sponsor.
Changing how the state approaches the tipped minimum wage, long set at $3.02 below the hourly minimum wage, was an approach backed by the restaurant industry to help struggling chefs and owners survive, especially those in Denver where the minimum wage is $4 more than the state’s. But worker advocates opposed the bill because it would let employers pay a smaller base wage to those who earned enough tips, essentially cutting a tipped worker’s pay by $4 an hour in Denver.
Under the compromise, the state’s so-called tipped credit of $3.02 won’t change at all. Local governments with higher minimum wages could choose to increase the tip credit, which means employers could have a higher amount of tips to offset tipped-worker pay. What it won’t do is eliminate the tipped minimum wage, which some called a “sub-minimum wage.”
House Finance Committee members Rep. Lorena Garcia, a Democrat from Adams County, and Rep. Yara Zokaie, a Fort Collins Democrat, voted against the bill.
“I don’t doubt that there is a problem in Denver of restaurants closing. We’ve seen a lot of data on that. But I do doubt that the only solution is to take food out of the mouths of the people who make the restaurant run. I’ve talked to servers who said the difference in losing their tips, that’s the difference in them being able to make ends meet,” Zokaie said. “To act like this is our only path forward, instead of the cost of rents, maybe other regulations that these businesses are put under, the cost of food — I just can’t get on board with that notion.”
In a statement by worker advocates, including One Fair Wage, called it “unfortunate” that local governments could still decide to keep the tipped minimum wage low, but thanked the committee members who “amended (the bill) to remove wage cuts.”
Likewise, Sonia Riggs, president and CEO of the Colorado Restaurant Industry, wasn’t completely satisfied but felt it was a small step in a better direction.
“This compromise isn’t going to help Colorado restaurants that are struggling to keep the lights on right now,” Riggs said in a statement. “What it does is provide a shred of hope that city and county governments, if they’re listening to their business community, will take on the challenge of finding some relief for local restaurants before it’s too late.”
Colorado restaurants pay $3.02 less than minimum wage to tipped workers. Called a tip credit, that amount hasn’t changed since 2006. But the minimum wage has.
So, when cities like Denver adopted their own higher minimum wage and the $3.02 offset didn’t increase, tipped workers got a larger pay raise than everyone else on staff.
Tipped wages in Denver have increased an average of $1 per hour per worker per year since 2015. It’s up 203% in a decade to $15.79 an hour. At the same time, the city’s minimum wage has grown 129% to $18.81.
“We view that as a relief to restaurants who can’t afford the increase every January 1 and who are shutting their doors and moving elsewhere,” Woodrow said at the start of the hearing. “I would remind the committee that in Denver, at $15.79, that is $4.79 higher than in Manhattan. And we know that New York City is more expensive.”
The bill, passed out of committee around 8:20 p.m., now moves to the full House.
Contentious data?
As new labor data was released this month by the Bureau of Labor Statistics, both sides of the tipped wage debate shared reports on how recent history proves their point. The data is from the Quarterly Census of Employment and Wages, which published third-quarter 2024 data on Colorado businesses, workers and wages last week.
The data showed the number of full-service restaurants dropped 9.1% between early 2023 and last September and that “confirms that Denver’s restaurant industry has experienced a rapid decline that sets it apart from comparable cities,” according to the Independent Restaurants for a Better Colorado, which is supported by organizations like EatDenver.
And compared with other similar-profile cities, Denver’s decline has fared worse, as seen in this chart:
But a report looking at the same data by the Colorado Center on Law and Policy, which opposes the bill, concludes that the rise in minimum wage can’t be blamed for “mass closures.” QCEW data showed that there was “a noticeable drop in establishments across all industries in Colorado and in Denver” in the second and third quarter last year. The number of businesses fell 5.8% in the first half of last year across Colorado so that “is almost certainly not a result of Denver’s higher minimum wage,” the report said.
Charles Brennan, the report’s author and the center’s director of income and housing policy, said he took the QCEW numbers on how many full-service restaurants there are in Denver and compared it with the population of the city, other counties in the state and the U.S. The per capita number restaurants compared to the local population remains high:
“Minimum wage increases have undoubtedly led to increased labor costs for employers and a whole host of other costs have also gone up creating challenges for restaurant owners not just in Denver,” Brennan said. “I think what we can look at are other statistics, things like unemployment numbers, unemployment insurance claims and others to give us a better sense of what the economy is doing. When we look at those numbers, we don’t see these massive swings or major spikes that could indicate some sort of issue or challenge.”
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More federal workers file for unemployment
As The Colorado Sun reported Friday, the number of fired federal workers filing for unemployment in Colorado finally went up, to 608 claims with more expected, according to the state Department of Labor and Employment.
Hundreds of claims had actually come in last month instead of the two dozen the agency was tracking through the official federal unemployment program. Apparently, not all probationary workers were eligible for federal benefits because they’d previously worked somewhere else during the base period counted for unemployment. So the state began counting up claims that listed a federal agency as the last employer.
Of the 608 claims so far, the state labor department also shared what federal agencies employees worked for and the counties they’re from. I didn’t have time to create a chart on it, so here’s what those numbers look like:
➔ Impacted? Some resources:
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Other working bits
➔ Meatless-meat company laying off 150 workers, closing Thorton plant. In one of the more bizarre warnings a company gave to the Colorado labor department, Meati Foods in Thornton said it is cutting 150 employees and shutting down its manufacturing plant “because our lender unexpectedly removed cash from our accounts and took control of remaining cash reserves on (Feb. 28),” the letter says. The company’s mycelium meat made from 95% fungi products attracted $365 million from investors, according to a report by AgFunderNews last year. An unnamed source close to Meati’s board also told AgFunder that “This is a bank-induced crisis,” and the company is looking for new funding.
➔ State rent assistance program expands. Colorado’s Emergency Rental Assistance program, which provides financial aid to income-limited renters behind on rent, added a new way to apply, through the Colorado CARE Center, a project from the Community Economic Defense Project in partnership with the Division of Housing. The CARE Center works with renters in the process of eviction and will have an ongoing “daily random selection list” starting March 17. The state Division of Housing will also take applications with the next window opening April 14 at 11 a.m. Funding provides up to seven months rent or $10,000, whichever is less. >> Details
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Thanks for sticking with me for this week’s report. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
This story was updated on March 20, 2025 to include a comment from the Colorado Restaurant Association.
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