Earlier this year, Denver’s restaurant licensing department released shocking data finding that restaurants across the state have been closing at an alarming rate – with most of those losses occurring in Denver. This week, the Colorado Chamber is watching HB 1208, which seeks to provide relief to the restaurant industry and preserve jobs.
According to the recent reports, more than 200 restaurants closed statewide in 2024 and Denver accounted for 82% of those closures. Restaurant owners attribute significant minimum wage increases at the local level as a major challenge for the industry.
Colorado’s current fixed tip credit only allows the minimum wage for tipped workers to be $3.02 less than the standard minimum wage, which doesn’t change if municipalities decide to increase the minimum wage above the statewide level. As a result, the minimum wage for tipped workers in Denver specifically has more than tripled in the last 10 years.
HB 1208 seeks to provide balance through a tip offset for municipalities that have a higher minimum wage than the rest of the state. The proposal would define the maximum tip offset as the difference between the local minimum wage and the state minimum wage, plus the constitutional $3.02 tip offset amount. This means that as local minimum wages increase, the tip offset will automatically adjust, preserving the ability of restaurants to compensate both tipped and non-tipped employees more effectively.
In a press release last week, the Colorado Chamber announced its support for the bill and applauded the efforts of the Colorado Restaurant Association to bring long-term viability to the industry.
“Restaurants are a cornerstone of Colorado’s economy and local communities, but many are struggling under the weight of rising labor costs and inflation,” said Loren Furman, president and CEO of the Colorado Chamber. “This legislation provides a balanced solution, giving restaurants the flexibility to adapt to local wage increases while continuing to offer competitive wages to all employees.”
“The unintended consequences of Colorado’s fixed state tip offset have been crushing local restaurants,” said Sonia Riggs, president and CEO of the Colorado Restaurant Association. “Paired with skyrocketing costs across the board, operators are closing their doors in record numbers, especially in Denver. That means workers are losing their jobs, and our communities are losing their souls. This bill will help stop the closures and allow restaurants to invest more in their back- and front-of-house teams.”
HB 1208 is scheduled to be heard in the House Business Affairs and Labor Committee this afternoon.