According to the Colorado Minimum Wage Order Number 35, effective January 1, 2019, a tipped employee is any employee engaged in an occupation in which he or she customarily and regularly receives more than $30.00 per month in tips. Tips include amounts designated by credit card customers on their charge slips.
Tip Credits and Minimum Wage
Under Wage Order 35, employers of tipped employees must pay a cash wage of at least $8.08 per hour if they claim a tip credit against their minimum hourly wage obligation.
If an employee's tips combined with the employer's cash wage of at least $8.08 per hour do not equal the minimum hourly wage of $11.10 per hour, the employer must make up the difference in cash wages. It is the policy of the Division of Labor Standards and Statistics that this rule applies on a weekly basis. The employee's tips combined with the employer's $8.08 cash wage must equal the minimum hourly wage when computed over a seven-day workweek in order for the employer to avoid making up any difference.
Tip Pooling Among Employees
According to Colorado wage law, employers may require employees to share or allocate tips and gratuities on a pre-established basis with other employees.
Under the Wage Order, if the employer requires tipped employees to share their tips with other employees who do not customarily and regularly receive tips (such as management or food preparers), the tip credit towards minimum wage is nullified.
Tip Credit Card Processing Fees
Under the Wage Order, employer-required deduction of credit card processing fees from tipped employees nullifies the allowable tip credits towards the minimum wage.
Employer Ownership of Tips
Colorado wage law allows for an employer to assert claim to, right of ownership in, or control over tips only if: the employer posts a printed card at least 12 inches by 15 inches in size with letters one-half inch high in a conspicuous location at the place of business. The card must contain a notice to the general public that all tips or gratuities given by the patron are not the property of the employee, but instead belong to the employer.
If the employer does not post a printed card detailing tip ownership as described above, the employer may not exert any control over cash tips designated for an employee.
- Overtime Calculation Examples (See Tipped Employee)
- Colorado Minimum Wage Order Number 35 (Sections 2 and 3)
- Colorado Revised Statutes 8-4-103(6) (Ownership and Sharing of Tips)
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