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Bill would bar employers from deducting credit‑card processing fees from workers' tips

2231152 · February 5, 2025
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Summary

House Bill 16-23 (tip protection) would prohibit employers from using any portion of tips, gratuities, or service charges to cover credit‑card processing fees. Unions representing hospitality workers supported the change; restaurant and hospitality associations urged halting the bill and urged federal or card‑network remedies instead.

House Bill 16-23 would prohibit employers from deducting any portion of a tip, gratuity or service charge to pay credit card processing fees, committee staff and witnesses said at a Feb. 5 Labor and Workplace Standards Committee hearing.

Staff explained that current merchant interchange fees typically range from 1.5 to 3.5 percent of a transaction and that, under current practice, employers may subtract a proportional share of processing fees from employees' tips.…

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