Federal & State Regulations | Tips - Colorado | J. J. Keller® Compliance Network

State Info

Summary of difference between federal and state regulations

There are certain instances where employers can pay employees at a rate lower than the minimum hourly wage specified by the federal Fair Labor Standards Act. The most common instance pertains to an employee who earns tips. The employer can deduct the amount of the tips (but only up to a certain maximum amount) from the hourly wage.

In Colorado, employers of tipped employees must pay a cash wage of at least $4.22 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 do not equal the minimum hourly wage, the employer must make up the difference in cash wages.

No more than $3.02 per hour in tip income may be used to offset the minimum wage of tipped employees.