Colorado restaurant workers, owners at odds over bill to cut tipped wages

The original version of HB-1208 aimed to make sure that cities with higher local minimum wages also increased their tip offset accordingly. If a city’s minimum wage was higher than the state’s $14.81 per hour, it would have to adjust the tip offset by the same amount, plus the existing $3.02 offset. Local governments would have needed to put this change into law by September 1, 2025.

But after weeks of debate in the House Finance Committee and strong pushback from labor groups, sponsors Rep. Steven Woodrow and Rep. Alex Valdez — both Democrats from Denver — amended the bill to kick the decision to city councils, rather than state mandates. If the bill passes, local governments could choose to adjust their tip offsets, but would not be required to do so.

Erica Beegle said she feels the pain of restaurant owners who have to operate amidst rising costs of food, labor and rent. She is a full-time bartender at Middleman, a cocktail bar on East Colfax in Denver, and a part-time graduate student at Metropolitan State University of Denver.

“Everyone is talking about restaurants closing because costs are too high, but we as workers aren’t immune from that,” Beegle said. “I feel really devalued as a worker having this on the table.”

Beegle has worked in Denver bars for 15 years. Her partner is a server and the two received paid sick time from their employers in 2020, thanks to a bill passed that year. 

The couple, however, are not offered health insurance through their employers and pay $1,000 each month for a marketplace plan, Beegle said.

Between making artisan drinks and supervising intoxicated customers, Beegle said the job is taxing and requires a level of skill akin to the ones she’s learning in her master’s of social work graduate program.

“If you want talented people who have creativity and experience and customer service skills to be in this industry, you have to offer them something,” Beegle said. “It’s demeaning because this is a real job and for a lot of people, it’s a lifelong career.”

Grace Tomczak has sustained the lifelong career that Beegle talks about, having bartended in New York, Hawaii and Colorado. She first picked up bartending  as a side gig to get to know her neighbors in Queens while working in the fashion industry in Manhattan, but eventually ditched fashion for full-time bartending.

“Restaurants are such an important fabric of our society and I do this work because I love them and I love the people I get to meet at restaurants and bars,” Tomczak said.

She most recently worked as the bar manager at MAKfam, a Chinese restaurant in Denver, where she made about $65,000. She said that was a livable wage but gave her little room for savings or vacations. She said she had to have back surgery due to the strain of bartending, which convinced her to leave the restaurant, recover and begin looking for work elsewhere. 

While she continues her recovery, Tomczak has focused her efforts on rallying against HB25-1208. She has spoken with several service industry colleagues and is organizing a group to testify in front of the state legislature.

“No one is disputing that it’s very hard to run a small business, let alone a restaurant,” Tomczak said. “But I find it very frustrating that the knee-jerk reaction was to cut the people at the very bottom of the totem pole.”

In her years of serving and bartending, Tomczak said she’s experienced more “tip fatigue” — when customers feel prices are too high already and tip lower than 18% — in Denver than she did in Hawaii, Aspen and New York. Customers complained to her about tips and service charges, and their low tips reflected their frustrations. 

Tomczak knows customers are dealing with the same stagnant wages and high costs of living she is. She doesn’t necessarily fault low-tippers. But cutting wages, she said, feels like the worst answer to a difficult problem.

“This bill just doesn’t make sense to me because consumers already don’t want to tip and now we’re making it so that we’re more dependent on their money,” Tomczak said. “It just feels like a backslide. It’s sad for everyone, everyone loses in this bill, in my opinion.”

Tomczak wonders why legislators aren’t considering rent caps for restaurant owners who lease their spaces, subsidized food costs or some other form of help. Anything but the wages, she said.

“It feels like they’re punching down instead of punching up,” she said.

Tomczak sees restaurants as a way to get to know her neighbors in a digital age of record-high loneliness and isolation, and she hopes to spend her life serving and bartending. But if her wages stagnate or are cut further, Tomczak isn’t sure how much longer she can go on.

“I should be able to make a comfortable living because I work hard and I work 40 hours a week,” she said. “That’s really the end of the story.”

Across town, on 17th, Lindsay Dalton believes the Weathervane Cafe — which she opened in 2012 — has had the success it’s had because she pays her employees more than the minimum wage. The lowest earner in her cafe makes $16 an hour and the highest makes $20.50. Employees are also offered paid time off and health care benefits, which Dalton sees as necessary to incentivize talented baristas to stay.

“My employees work harder than I do and I’m sitting in a brand new car that I bought myself,” Dalton said. “My employees know how to run my business, which I’m so grateful for, and the least I can do is pay them decently and give them benefits.”

Dalton has testified against HB25-1208 because she believes it will hurt an already struggling labor force. She has experienced slow business at the cafe but thinks passing a wage cut will hurt her business even more since many of her patrons are service workers at other restaurants.

“The industry is slowing, but if you're running a business and you don’t feel like you can handle a few bad months, I don’t think your business is viable,” Dalton said. “To pass that onto your employees is a horrible decision.” 

Sonia Riggs, president and CEO of the Colorado Restaurant Association, said the bill is a necessary antidote to the slew of restaurants closing in Colorado.

“Restaurants are bleeding money by trying to stay open and recoup costs,” Riggs said. “I think what’s going to happen is pretty soon, as more and more leases expire, we’re going to see more restaurants closing their door.”

In an ideal world, Riggs said labor would make up about 25 to 30% of a restaurant’s budget. But most restaurants in Denver, she said, are spending about 50 to 60% of operating costs on labor.

“The problem is the bill is sort of gutted to the point where there's no guarantee that any restaurant is going to be helped from it,” Riggs said. “And more restaurants are going to have to close their doors.”

She’s frustrated at the notion that supporting the bill to lower wages is about greed. But she’s concerned about her ability to keep operating if costs of labor keep rising.

“I’m not sure it’s a win to have a higher tipped minimum wage if it means cutting hours, if it means cutting positions and if it means restaurants are closing,” Tronco said. “This is not about putting more money in our own pockets, it’s about staying open for business.”

The bill passed a third reading in the Colorado House of Representatives on Thursday on a 44-20 vote and now heads to the Senate, where it has not yet received a scheduled date.