Overview:
Following strong opposition from workers, residents and some restaurants to HB25-1208, the tipped minimum wage bill has been weakened.
Colorado’s controversial HB25-1208, which originally sought to lower the tipped minimum wage across Colorado to $11.79, has passed out of the House Finance Committee with significantly less bite after intense opposition from workers, residents and some restaurants.
“The restaurant industry is a luxury to those who dine, but it is a lifeline to those who work within it,” said Emily F., who bartends in the Colfax area. Emily, who is from Denver and has been in the restaurant industry for 16 years, declined to use her last name over concerns about being fired for voicing her opposition to HB25-1208.
“People are just going to quit if they cannot pay their bills or express their creativity,” she said. HB25-1208 initially aimed to set the state-wide tipped minimum wage at $11.79, which applies Colorado’s $3.02 tip credit to the state minimum wage of $14.81.
Right now, Denver, Boulder and Edgewater have chosen to raise their minimum wage above $14.81 to reflect higher costs of living, but they still apply the $3.02 tip credit to calculate the city-wide tipped minimum wage. The tipped minimum wage bill would have overridden that calculation to force all cities in Colorado to lower their tipped minimum wage to $11.79 regardless of the minimum wage set by the municipality.
Heated Controversy in the Community
Community members, service workers, public officials and restaurants have publicly opposed the tipped minimum wage bill over its wage cuts for service workers. In a letter to lawmakers, Denver Auditor Tim O’Brien said the change would reduce tipped workers’ yearly salaries by more than $8,000 and expressed concern over its effect on workers’ ability to purchase necessities like baby formula.
Many in the industry, including Emily, see it as a direct attack on their livelihood. “A lot of us live on our own and are becoming more concerned about our abilities to provide for ourselves with everything becoming more expensive,” Emily said. “If tip culture is the issue, then you need to provide a livable wage to all of your employees because tips are not what they used to be. This does not provide a liveable wage.”
The bill’s supporters, which include Culinary Creative Group, the Colorado Restaurant Association and tourism organization Visit Denver, deemed it the “Restaurant Relief Act” and pushed back by saying it would provide necessary relief to restaurants struggling to pay high labor costs.
A public hearing for the tipped minimum wage bill on Mar. 3 drew five hours of contentious testimony from both parties and spurred intense blowback against the bill on social media, with several pages calling for users to boycott restaurants that testified in support of the bill and the restaurant owners in question subsequently reporting “harassment” and negative reviews due to their stance.
After several weeks of public pressure, the House Finance Committee amended its language last Friday to leave the decision to lower the minimum tipped wage up to the cities themselves.
Koan Goedman, who co-owns Huckleberry Coffee, said his company wouldn’t have used the additional tip credit even if the bill had passed in its original form. Huckleberry pays all of its tipped hourly employees a base pay of $16.50, and Goedman said he and co-owner Jason Farrar had “no interest” in lowering that to $11.79.
“We want this to be a place where, if people want to be coffee professionals as a profession and to engage with it in a long-term, non-transitional kind of way, that they can do that with us,” Goedman said. “Part of that means we need to keep growing as a coffee company so that people who want to grow with us have opportunities to do so. But at a minimum, those hourly tip baristas who are, from a revenue standpoint, about half of our company in terms of what they bring in, we want them, and we need them, to be making a good living while being at Huck.”
Employees at Huckleberry are eligible for a range of benefits, including paid time off and health insurance. The founder acknowledged that Huckleberry’s pay and benefits system “wouldn’t work for everyone,” and, when it came to HB25-1208, said he saw both sides.
“I don’t give a shit about ‘Restaurant Group from Chicago A, B, C or D’ complaining about minimum wage. Like, y’all are fine,” Goedman said. “What I do worry about is much smaller brick-and-mortar shops on Colfax or on South Broadway. These one-off, mom-and-pop type shops, can they continue to pay this sort of never-ending minimum raise bump? I don’t know what the answer to that is, but I do hear their concerns that that is scary for them.”
What Are Restaurant Workers Actually Making?
Beyond the politics of HB25-1208, Emily said the restaurant industry has undergone a paradigm shift since the end of COVID. While service workers used to make their living off of tips, she said, now they are “dependent” on hourly pay.
Paradoxically, as the minimum tipped wage has increased, so has the sentiment that restaurant workers are making too much money, which has also affected her tips. The notion that servers are making too much is central to the debate around HB25-1208, and has even been cited by Denver Mayor Mike Johnston.
“We know that a big part of (restaurant closures) is the increase in the minimum wage. It’s meant that restaurant labor costs have gone up about 200% in the last eight to ten years,” Johnston said on City Cast Denver in February. “What we see is the equity impact on folks in the restaurant industry. I talked to a restauranteur (Juan Padró) last week who said, ‘My servers are making about $120,000 a year because they have both the minimum wage plus their tips. My manager is making $80,000, and my back-of-restaurant staff are making $40,000.’”
Padró owns Culinary Creative Group, which operates several Denver restaurants, including Mister Oso, Señor Bear and the Fox and the Hen, and is a major proponent of HB25-1208. While Culinary Creative did not confirm this figure with Bucket List Community News at the time of publication, statistics around server wages can be difficult to pinpoint due to the wide range in hours and variability of tips.
According to Glassdoor, servers in Denver can make between $46,000 and $70,000 per year, including tips, while line cooks make between $40,000 and $49,000. Indeed estimated that Denver servers make an average of $19.09/hour with $100 a day in tips, while line cooks make around $21.27 an hour.
In an attempt to offset pay disparity between front and back of house, some restaurants have implemented service charges to spread “tips” across the entire staff; however, unlike tips, these charges are not legally designated for workers and often lack transparency.
Despite the industry facing numerous challenges, Emily is cautiously optimistic, especially now that HB25-1208 has been “de-fanged,” so to speak. Though she plans to start nursing school in the fall, she will continue bartending for the time being.
“(The amendments) gave me a little bit of hope that there is still a chance for the people who work within the industry, but it is still scary,” she said.