What Is Colorado’s Server Minimum Wage and Tip Credit?

Colorado’s server minimum wage for 2026 is $12.14 per hour in direct cash from the employer, with tips expected to bring total pay to at least the full state minimum of $15.16 per hour.¹ The $3.02 gap between those two numbers is called the tip credit. If a server’s tips don’t close that gap over the workweek, the employer has to pay the difference.² Several cities, Denver included, require higher rates.

Who Counts as a Tipped Employee

The reduced cash wage only applies to workers who regularly receive more than $30 per month in tips.³ A line cook who occasionally gets a tip handed over the pass doesn’t qualify, and the employer owes that worker the full $15.16 minimum.

Tips belong to the employee who earned them. An employer can’t keep them or redirect them, except through a tip pool that follows the rules below.

When Tips Don’t Reach the Minimum

The tip credit is capped at $3.02 per hour no matter how big a night a server has. But the test runs the other direction too: if cash wages plus tips don’t average $15.16 per hour across the workweek, the employer must make up the shortfall.² It’s a workweek calculation, not a shift calculation. A packed Saturday doesn’t let the employer off the hook for a slow Monday lunch.

The math on a 40-hour week: the server has to earn at least $606.40 (40 × $15.16). Direct wages cover $485.60 (40 × $12.14), leaving $120.80 that tips need to cover. If tips come in at $100, total pay is $585.60, and the employer owes another $20.80 to close the gap.

Overtime Is Calculated From the Full Minimum Wage

Colorado requires overtime pay in three situations: more than 40 hours in a workweek, more than 12 hours in a single workday, or more than 12 consecutive hours. Whichever rule produces the higher pay is the one that applies.⁴

For tipped workers, overtime is 1.5 times the full minimum wage, not the reduced tipped wage. The $3.02 tip credit stays fixed and does not grow during overtime hours.⁵ A server working 45 hours is owed at least $22.74 per hour for the five overtime hours (1.5 × $15.16). The employer can still apply the $3.02 tip credit, so the required direct cash wage for those overtime hours is $19.72, and nothing less. An employer who calculates overtime off the $12.14 base is underpaying.

What Can and Can’t Be Deducted

Walkouts, broken glassware, cash drawer shortages, required uniforms: these are common deductions, and federal law caps all of them at the point where they’d drop the worker’s pay below the full minimum wage or cut into overtime.⁶ This holds even when the loss is the worker’s fault. A server already earning near the floor cannot be docked for a dine-and-dash if the deduction would drop their pay below $15.16 per hour. Required uniforms are a business expense, not something that can be charged back to a tipped employee whose pay is already at the minimum.

Tip Pooling Rules

Colorado employers can require tip pooling, but a pool only counts as valid if it meets three conditions.⁵ Workers must be told in advance how tips will be shared and who’s included. Customers must receive written notice (menu, table tent, or receipt) before they decide what to tip. And every worker in the pool must still receive at least the full minimum wage in total pay.

Cooks, dishwashers, and other non-tipped staff can be added to a pool, but the moment they are, the tip credit disappears for everyone in it. The employer then has to pay the full $15.16 in direct cash wages to all pool participants.

Managers, Supervisors, and Owners Are Out

Managers, supervisors, and owners cannot take any portion of other employees’ tips, whether through a formal pool or an informal jar on the counter.⁷ The rule covers anyone whose primary duty is running the business and who directs the work of at least two full-time employees, and anyone holding at least a 20% equity stake. A manager who personally and solely serves a table can keep a tip the customer left for that service, but once it goes into a shared pool, it’s off-limits.

Denver and Other Local Rates

When a city sets a higher minimum wage, the local rate controls. Denver’s 2026 standard minimum is $19.29 per hour and its tipped minimum is $16.27 per hour.⁸ A Denver server’s tips need to lift total pay to $19.29, with the employer covering any shortfall.

HB25-1208 took effect January 1, 2026 and lets local governments with wages above the state minimum raise their tip offset above $3.02.⁹ The floor: no local government can set a tipped cash wage lower than the state tipped minimum, which is $12.14 for 2026. Denver has not used this option, so its tip credit is still $3.02. Servers in cities that adopt a larger offset should watch their direct cash wage for changes.

If You’re Being Underpaid

A server shorted on the tipped minimum, overtime, or tip pool rules can file a Labor Standards Complaint with the Colorado Division of Labor Standards and Statistics, with pay stubs and schedules attached.¹⁰ Sending the employer a written demand for unpaid wages, before or alongside the complaint, starts a 14-day clock. If the employer doesn’t pay within those 14 days, the worker can recover penalties on top of the unpaid wages.

For non-willful violations, the employer owes the unpaid wages plus a penalty of double the wages owed or $1,000, whichever is greater. Willful violations jump to triple the wages owed or $3,000.¹¹ The state can also assess daily fines running from the date wages were originally due.

1
Colorado Department of Labor & Employment. Labor Standards and Statistics
2
Legal Information Institute. Colorado Code 7 CCR 1103-1-6 – Deductions, Credits, and Charges
3
Colorado Department of Labor & Employment. INFO #1 – 2026 COMPS and PAYCALC Orders
4
Colorado Department of Labor and Employment. INFO #1 – 2026 COMPS and PAYCALC Orders
5
Colorado Department of Labor and Employment. Tips (Gratuities) and Tipped Employees Under Colorado Wage Law
6
U.S. Department of Labor. Fact Sheet #16 – Deductions From Wages for Uniforms and Other Facilities Under the Fair Labor Standards Act (FLSA)
7
U.S. Department of Labor. Fact Sheet #15B – Managers and Supervisors Under the Fair Labor Standards Act (FLSA) and Tips
8
City and County of Denver. Denver’s Minimum Wage in 2026
9
Colorado General Assembly. HB25-1208 – Local Governments Tip Offsets for Tipped Employees
10
Colorado Department of Labor & Employment. Worker Complaints and Employer Responses
11
Colorado Department of Labor and Employment. INFO #2B – Orders of Wages, Penalties, Fines, and Consequences for Non-Compliance