House advances bill to give cities local control over tip offsets amid heated debate over worker pay

The Colorado House on March 18 advanced legislation to let local governments set the amount that employers may credit tips toward required hourly pay, a move sponsors said would give cities flexibility to respond to restaurant closures and opponents said could depress pay for low-wage tipped workers.

Representative Woodrow, the bill's prime sponsor, told the House he and co-sponsors brought what they called the Restaurant Relief Act to address steep restaurant losses in Denver and other cities and to give local elected officials tools to account for the tip offset tied to local minimum wages. “It is an honor to stand before you and present HB 25 12 o 8, the Restaurant Relief Act,” Woodrow said on the floor.

The bill would remove a statewide, static approach to tip offsets and permit local governments that set a local minimum wage above the state level to determine the method for calculating the tip offset that applies in their jurisdiction. Sponsors said the change preserves local control for cities to act without imposing a statewide mandate.

Representative Valdez, a co-prime sponsor representing parts of Downtown Denver, said Denver has seen “up to 22,000 jobs” lost and rising numbers of restaurant closures and contended the bill is intended to stop further job losses. “Our goal is to stop that,” Valdez said. She and other sponsors said the final draft is a compromise that does not mandate wage cuts and that local officials will be responsible for setting any local offsets.

Opponents including Representative Mabry and Representative Zokai said the bill risks taking money from the lowest-paid workers. “It can never be a solution ... to cut wages for some of the lowest paid workers in the state. Period,” Mabry said on the floor. Zokai added that the bill could increase confusion about tip accounting and make wage theft easier to perpetrate, warning of constitutional and implementation questions.

Other members pressed fiscal and legal questions and whether the change would lead to reduced hours, fewer benefits or greater opportunity for wage theft. Representative Garcia said he worried the proposal did not fully address supply-chain and market pressures affecting restaurants and that the bill’s authors had made compromises to reach a zero fiscal note.

Floor action: the House adopted the finance committee report on the bill and later the Committee of the Whole reported House Bill 12-08 as passed on second reading and placed on the calendar for third and final passage. The Committee of the Whole report that included HB 12-08 passed on a recorded vote when the House adopted the report of the Committee of the Whole (41 yes, 19 no, 5 excused).

Amendments and recorded votes: an amendment approach seeking a different balancing measure in floor debate was considered in related proceedings earlier in the day; within the bill’s floor debate sponsors emphasized that the final language does not mandate wage reductions.

Why it matters: the measure aims to give local governments flexibility to respond to concentrated restaurant closures — particularly in high-wage cities — while opponents say it risks increasing income instability for tipped workers and could complicate enforcement of wage laws. The bill remains subject to final passage on third reading.

Ending note: The House placed the bill for third reading after the Committee of the Whole report; sponsors said they intend localities to use the authority to craft offsets that reflect local conditions rather than impose a one-size-fits-all statewide change.