HB 25-1208

HB 25-1208, also known as Local Governments Tip Offsets for Tipped Employees, allows local governments in Colorado to increase the tip offset for workers who earn tips above the state’s minimum wage. This means that starting January 1, 2026, cities or counties can adjust how much they subtract from a tipped employee's wages when calculating their hourly pay, as long as the worker still earns at least $3.02 more than the state’s minimum wage after tips are considered. The bill has been signed into law and is now in effect. This impacts local businesses that employ tipped workers and ensures these employees meet a certain earning threshold.

Official Summary

Colorado law allows a local government to establish local minimum wages in excess of the statewide minimum wage established in the state constitution. A local government that enacts a minimum wage must provide a tip offset for tipped employees in an amount equal to the tip offset amount described in the state constitution, which is $3.02. The act states that on and after January 1, 2026, a local government that has enacted a code or an ordinance imposing a minimum wage that exceeds the state minimum wage may increase the amount of the tip offset associated with the local minimum wage; except that a local government shall not impose a tip offset in an amount that allows a tipped employee to earn less than the state minimum wage minus $3.02. (Note: This summary applies to this bill as enacted.)

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