Latest news with #HouseBill25-1208
Yahoo
17-03-2025
- Business
- Yahoo
Colorado lawmakers back off plan to force cuts to tipped minimum wage
People dine at a restaurant on Pearl Street in Boulder on Aug. 14, 2021. (Quentin Young/Colorado Newsline) State lawmakers have backed off a plan that would have led to a steep pay cut for servers, bartenders and other tipped workers in some Colorado cities, but they still want to allow local governments to make similar changes on their own. In a Friday night hearing, lawmakers on the House Finance Committee voted 11-2 to approve a heavily amended version of House Bill 25-1208, sponsored by state Reps. Steven Woodrow and Alex Valdez, both Denver Democrats. The bill concerns the 'tip offset' — the dollar amount that employers can subtract from the minimum wage paid to tipped workers, as long as tips make up the difference — in cities and counties that have raised their local minimum wages above the statewide level. As originally introduced, HB-1208 would have forced those local governments to increase their tip offset beginning in October, threatening tens of thousands of workers with abrupt pay cuts of thousands of dollars per year. The proposal drew fierce pushback from progressive and labor groups and was the subject of two long, contentious committee hearings at the Capitol, where opponents accused Democrats of betraying low-wage workers while restaurant owners pleaded for relief from rising labor costs. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX The amended version approved Friday night would allow cities and counties that increase their local minimum wages to increase their tip credits above the fixed $3.02 per hour set in current state law. In theory, a local governments could raise the minimum wage for non-tipped employees as high as it wished, while maintaining a tipped minimum wage of $11.79 an hour, the statewide minimum. But HB-1208 would no longer mandate those tip credit increases, which would likely preserve the current tipped minimum wage of $15.79 an hour in Denver, where city council members have been adamantly opposed to any cuts. 'If the mark of a good compromise is that both sides leave dissatisfied, (this amendment) is a total banger,' Woodrow told lawmakers on the Finance Committee Friday night. In a statement, a coalition of progressive groups offered a qualified endorsement of the compromise, which it said 'avoids an immediate wage cut for tipped employees and preserves some local control.' But the amended bill, which only allows cities to increase their tip credits, should also allow the credits to be reduced or eliminated altogether, they argued. 'It's still unfortunate that the bill only gives local control to local governments if they want to vote to keep their tipped minimum wage low, but will not allow them to vote to end the subminimum wage for tipped workers,' added the groups, including the Colorado AFL-CIO, One Fair Wage and Towards Justice. After being advanced by the House Business Affairs and Labor Committee last month, HB-1208 stalled in the Finance Committee over the last several weeks amid pressure from labor groups and growing skepticism from Democratic lawmakers. Bill proponents say that a solution to the tip credit issue has been a long time coming. In 2006, Colorado voters approved a constitutional amendment to raise the statewide minimum wage and adjust it annually based on inflation. The measure also fixed the state's tip offset at $3.02 an hour. Over time, the flat $3.02 credit has shrunk to a smaller and smaller percentage of the overall minimum wage — from over 40% in 2007, when the minimum wage was $6.85 an hour, to just 20% today, with the minimum wage set at $14.81. In cities that have passed local minimum wage hikes as allowed by a 2019 law, the percentage is even lower. In an earlier attempt at compromise on Friday, Woodrow and Valdez floated an amendment that would have given cities like Denver a period of several years to gradually fix their tip credits at 25% of the regular minimum wage. The proposal would have effectively frozen Denver's tipped minimum wage at its current level, suspending annual increases based on inflation, for the next four years. 'If at one point (the tip credit) offered 40% relief, and now it offers 16% relief, (then) 25% relief … gets us pretty close to the middle of the relief that we're looking to afford restauranteurs going forward into the future,' said Woodrow. But after a delay of several hours, Woodrow asked the committee to approve the local control amendment instead. HB-1208's proponents argue that giving local governments the ability to increase tip offset will benefit workers more broadly, since multiple Colorado municipalities that have considered local minimum wage hikes in recent years have abandoned or scaled back their proposals out of concern for its effect on bars and restaurants. Two Democrats on the Finance Committee, Reps. Lorena Garcia of Westminster and Yara Zokaie of Windsor, voted against advancing the bill. 'I don't doubt that there is a problem in Denver of restaurants closing,' Zokaie said. 'But I do doubt that the only solution is to take food out of the mouths of the people who make that restaurant run.' Democratic Rep. Brianna Titone of Arvada called herself a 'reluctant yes' on the amended bill. Rep. Sean Camacho, a Denver Democrat, said he had been a 'hard no' on the original version of HB-1208 but thanked its sponsors for their efforts to 'get this to a place that would make a tangible difference in our community.' 'I just hope this is enough,' Camacho said. 'I hope this body did not let the people in our community down.' SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
21-02-2025
- Business
- Yahoo
Colorado lawmakers advance bill to cut tipped minimum wage in Denver, Boulder
An employee at the Briar Common Brewery + Eatery in Denver pours a beer for a patron on Jan. 7, 2021. (Moe Clark/Colorado Newsline) Tens of thousands of servers, bartenders and other tipped workers in Denver and Boulder could face a significant pay cut under a bill being advanced by Colorado lawmakers who say the change is necessary to help a struggling restaurant industry. Members of the House Business Affairs and Labor Committee voted 11-2 in favor of House Bill 25-1208 on Thursday night, after nearly six hours of testimony from supporters and opponents. Democratic state Reps. Bob Marshall of Highlands Ranch and Sheila Lieder of Littleton were the only 'no' votes. The bill would dramatically increase the 'tip offset' — the dollar amount that employers can subtract from the minimum wage paid to tipped workers, as long as tips make up the difference — in cities and counties that have raised their local minimum wages above the statewide level. For a tipped restaurant employee in Denver, the minimum wage would fall from $15.79 to $11.79 per hour; at 40 hours a week, that could mean over $7,000 a year in lost pay. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Restaurant owners and business groups, who have lobbied for the change for years, say that high labor costs, combined with pandemic disruptions and inflationary pressures, have caused hundreds of local restaurants to close their doors and pushed many others to the brink. 'Labor costs, which used to be 25 to 30% of restaurants' costs, are now 50 to 60%,' Sonia Riggs, president of the Colorado Restaurant Association, told the committee. 'Menu prices can't keep pace or consumers stop dining out. It's like death by a thousand increases.' Workers, labor unions and progressive groups, however, say the bill is a misguided, and potentially counterproductive, effort to help an industry that faces a variety of economic headwinds. The average restaurant server in the Denver metro area makes a little over $39,000 annually including tips, according to Bureau of Labor Statistics data. HB-1208's 'huge overnight pay cut' for those workers, said Caroline Nutter of the Colorado Fiscal Institute, attempts to balance the industry's books on the backs of its most vulnerable employees. 'We need to consider what slashing wages by almost $140 million a year might due to consumption, demand and revenue,' Nutter said. 'There are ways to address the issues that restaurants are facing. There must be a way to do this with workers at the table and without starting (by) cutting the wages of some of the lowest-paid workers in the state.' The state's labor department says there are roughly 21,000 tipped employees who could be affected by the change. No amendments to the bill were made in Thursday's committee hearing, though several Democrats on the panel said they expected changes at a later stage. State Rep. Steven Woodrow, a Denver Democrat and one of the bill's sponsors, said he would continue talks with opponents, but something must be done to help an industry in 'crisis.' 'We have ideas on how we can make the policy more labor-friendly,' Woodrow said. 'We are looking for partners on the other side to have those conversations with. At this point, we've run up against fairly stiff opposition.' Two major changes to Colorado's wage laws enacted over the last 20 years set state and local policymakers on a collision course with the restaurant industry. In 2006, Colorado voters approved a constitutional amendment to raise the statewide minimum wage and adjust it annually based on inflation. The measure also fixed the state's tip offset at $3.02 per hour. Over time, the flat $3.02 tip credit has shrunk to a smaller and smaller percentage of the overall minimum wage — from over 40% in 2007, when the minimum wage was $6.85 an hour, to just 20% today, with the minimum wage set at $14.81. And in 2019, Democratic lawmakers repealed a preemption law that banned cities and counties from setting their own, higher minimum wages. A handful of local jurisdictions — the cities of Denver, Boulder and Edgewater, along with unincorporated Boulder County — have done so. If passed, by October of this year, HB-1208 would effectively exempt tipped workers from local minimum wage hikes, by requiring local governments to increase their tip credits by an amount equal to the difference between the local and state minimum wages. For example, in Denver, which has raised its minimum wage to $4.00 above the state's level, the tip credit would rise to $7.02. After one year, cities could raise or lower their tip credits by no more than 50 cents annually, within a certain range. HB-1208 has divided local elected officials in cities with higher minimum wages. Denver City Council has taken a position against the bill, and several council members testified in opposition in Thursday's hearing. 'This is one of the most flawed pieces of legislation I've ever seen come through this building, and I don't say that lightly,' Denver City Council Member At-Large Sarah Parady told lawmakers. 'I am astounded, and as a local legislator insulted, by the idea that the state of Colorado would force its biggest and most expensive city to directly cut worker pay by thousands of dollars per year.' But Mayor Mike Johnston supports the change, said Dominick Moreno, a former state senator and the mayor's deputy chief of staff for strategy. Moreno was a sponsor of the 2019 legislation allowing local governments to raise their minimum wage. The tip credit issue should have been settled at the time, he said, but the sides weren't able to come to an agreement. 'I think everyone understood at that time that we were kicking the can down the road, and that eventually something would need to be done to address this issue,' Moreno said. 'I think now you're seeing quite an untenable situation for the restaurant community.' Marshall took issue with the abrupt wage cuts the bill would force, floating the possibility of a 'glide path' for local governments to comply with. 'This issue has been a long in coming, over eight years, piece by piece,' he said. 'And yet we're trying to cram down the workers in one year.' While there's little doubt that restaurants have faced a variety of challenges in recent years, some opponents of HB-1208 dispute the prevailing narrative from bill sponsors and industry groups that Colorado's dining scene is in free fall. 'The restaurant industry in Denver isn't dying,' Matthew Fritz-Mauer, director of the labor division at the Denver Auditor's Office, told lawmakers. 'The sky is not falling. There is no reliable empirical support for this claim.' A widely circulated statistic showing a 22% decline in the number of restaurant licenses in Denver since 2022, Fritz-Mauer said, is based on 'incomplete data' and doesn't account for a significant change in the city's licensing system in 2023. He cited BLS data showing stable employment figures for the industry as a whole. Moreno acknowledged that changes to licensing procedures 'may have disrupted the numbers a little bit,' but said the mayor's office still finds the figures 'quite concerning.' Other proponents of HB-1208 said the BLS data, which includes workers in commissaries used by food trucks, caterers and online-only 'ghost kitchens,' doesn't accurately reflect the health of the hospitality industry. Democratic state Rep. Alex Valdez of Denver, another HB-1208 sponsor, cited the recent closure of familiar spots around the state Capitol as proof that the bill is necessary. 'It's astounding to me that we had testimony from the auditor's office that there's no problem,' Valdez said. 'Everyone in Colorado can see the problem. Everyone in Denver can see the problem. It's a major problem.' Analysts say per-person restaurant visits have steadily declined from their peak in the 1990s, part of a broader trend towards American adults spending more of their time alone or at home. The COVID-19 pandemic accelerated those trends, and while revenues and employment in the foodservice sector at large have rebounded to pre-pandemic levels, that bounceback has been achieved through a shift away from full-service, independent restaurants towards large chains and expanded takeout and delivery service. Dozens of local restaurant owners testified in support of HB-1208 on Thursday. Many of them said that changing the tipped wage would help their bottom lines, but not by much. 'It's everything. It's rent, cost of goods, labor,' said Jeff Osaka, a Denver restauranteur who said he's been forced to close one of his two remaining restaurants, Osaka Ramen. 'So this bill would help a fraction of that. This is a good stepping stone.' But Jesse Thornton, an airport bartender and member of foodservice union Unite Here Local 23, said that after decades of extremely low pay, minimum wage hikes over the last decade have finally meant 'real wages' for restaurant employees for the first time. Rolling back those gains would be 'devastating' for workers who live paycheck to paycheck, he said. 'Restaurant owners would profit from this bill, and working Coloradans would not,' said Thornton. 'Tipped workers don't get raises unless the minimum wage goes up. That's a fact of the industry.' SUPPORT: YOU MAKE OUR WORK POSSIBLE
