MYTH VS. FACT
THERE ARE VOICES pushing a narrative about the restaurant industry in Colorado that lacks evidence and support from the employees they say they represent. Below are some basic facts that dispel the myths they’re pushing.
MYTH
There is a sub-minimum wage in Colorado.
EVERY worker in Colorado is already guaranteed to earn at least the current non-tipped minimum wage, including tipped employees. If, after wages and tips, an employee does not earn their city’s non-tipped minimum wage per hour, their employer must pay the difference. It’s the law!
In fact, when Congress codified the tip credit in 1966, the Congressional research service explained that the law does not mean that a tipped worker may earn a subminimum wage; rather the tip credit provisions change the composition of a worker’s earnings. Furthermore, the restaurant owner must pay all the contributory taxes, FICA, FUTA, and SUTA on both the tipped wage paid and the tips received from patrons.
FACT
The custom of tipping is racist and originated from slavery.
MYTH
This is patently false. The American custom of tipping was imported from western Europe, where providing a tip to workers in private homes was a common practice. University of Massachusetts-Amherst professor Gerald Friedman says tipping was not “particularly racial,” but rather “more a matter of customers showing off their wealth.” Additionally, Friedman points to southern states that passed laws early in the 20th century that made it illegal to receive tips as further disputing the notion of any link between tipping and slavery.
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FACT
MYTH
This bill is trying to give tipped workers a pay cut.
This bill will NOT decrease the non-tipped minimum wage in any part of Colorado, and wage increases will continue for all workers, as the minimum wage and menu prices rise with inflation. Tipped food-and-beverage workers will continue to earn great pay and their tips.
Increasing the tip offset also helps owners hire more staff and increase staff hours, so tipped workers earn more and have more help on the job. Right now, operators are cutting staff hours and even staff positions, like bussers and hosts.
This bill DOES help back-of-house workers who have been left behind since 2019, when the minimum wage became tied to inflation, by giving restaurants the flexibility to invest in their kitchen crews and keep their doors open.
FACT
MYTH
Tips are better in states without a tip credit.
FACT
MYTH
Restaurants are crying wolf and will be just fine without an increase to the tip offset.
Restaurants are already closing in droves, which means workers are losing their jobs. We will continue to see closures if we don’t do something right now.
FACT
HARD TRUTHS.
REAL RESTAURANT DATA.
This bill stops the trend of restaurants closing across Colorado and ensures that all food-and-beverage workers earn more.
Restaurants are closing across Colorado at an alarming rate, an unintended consequence of Colorado’s immovable tip offset.
92% of Colorado restaurants were forced to increase menu prices when the minimum wage increased in 2025.
68% of Colorado restaurants were forced to reduce staffing and cut employee hours when the minimum wage increased in 2025.
$52,591: the average cost to Colorado restaurants when the minimum wage increased in 2025
Aligning the tipped wage for food-and-beverage workers while allowing localities to adjust wage rates as needed frees up money to support back-of-house workers, invest in more staff hours overall, and keeps restaurants open and employing 10% of Colorado’s workforce.
63% of local restaurants will invest in higher wages for kitchen crews if the tip offset is higher.
56% will increase staffing and give more hours to current workers.
43% will stay open for business longer.
Restaurants employ more women and people of color than any other industry.
6 in 10 cooks and chefs are people of color.