Overview: Colorado has enacted legislation (House Bill 19-1254) that clarifies and amends the notice requirements for tip sharing.
Effective Date: House Bill 19-1254 takes effect August 2, 2019.
Details:
Background:
Under Colorado law, gratuities are generally the sole property of the employee who receives them. However, employers may require tipped employees to share gratuities with other employees as long as they satisfy certain notice requirements. Under current rules, the notice requirement states that employers must display a 12” x 15” printed card about tip sharing in a conspicuous location for customers.
House Bill 19-1254:
Effective August 2, 2019, House Bill 19-1254 repeals the reference to the 12” x 15” printed card and clarifies that employers with tip sharing arrangements must notify each patron in writing, including a notice on a menu, table tent, or receipt, that gratuities are shared among employees.
Note: There are additional state and federal rules regarding tip sharing arrangements. For example, both state and federal law prohibit employers from claiming the tip credit toward satisfying minimum wage if they require tip sharing between tipped employees and those who don’t customarily receive tips, such as dishwashers, cooks, and other “back of the house” employees.
Action Required: Colorado employers with tip sharing arrangements should ensure they comply with the notice requirements and other applicable rules regarding tip sharing.
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