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Key facts tipped employees should know in Colorado

On Behalf of | Jun 6, 2023 | Employment Law

Many employees work, at least in part, for tips. This is most common in bars and restaurants across Colorado, but you’ll also find other professionals, such as food delivery drivers or valets, who rely heavily on tips to make ends meet.

Those who work in “tipped” industries must be sure that they understand exactly how they should be paid. It’s also important for employers to know what regulations they need to follow when hiring tipped employees. Things can go smoothly as long as everyone is on the same page, but there’s often a fair amount of confusion. As such, here are a few important points that all involved should keep in mind.

The minimum wage has to be met

It is legal for tipped workers to make base pay that is less than minimum wage. In Colorado, the minimum wage is $13.65 per hour. A tipped employee needs to be paid at least $10.63 per hour. But this is only true if the tips that they make bring them up to minimum wage. If not, then the business is required to pay them the difference.

Tip pools are allowed

Another thing to keep in mind is that an employer can tell employees that they have to use a tip pool. This means that all of the tips are going to be combined. They will then be split up among the employees who were working during that shift. It is worth noting, however, that employers have to notify employees about this arrangement in writing before making them use a tip pool. Additionally, in order to protect workers from wage theft, an employer and managers cannot be part of a tip pool.

Credit card fees cannot be deducted

Similarly, employers are not allowed to deduct credit card fees from their employees’ tips. It is true that fees are often applied when customers use credit cards, but these are to be paid by the establishment itself. Applying fees to tips will simply result in employees covering those fees, rather than employers, and can be perceived as a form of wage theft.

Sorting out a dispute

It is good for both employers and employees to understand how tipped wages work. However, there are still instances where disputes are going to arise. That’s when everyone needs to know about their legal options. Seeking legal guidance proactively is advisable, as a result.