Colorado bill would ban businesses from prohibiting tipping

From McDonalds to Walmart, numerous businesses throughout the country prohibit their employees from accepting tips. But that practice could soon come to an end in Colorado. 

If passed by the state legislature, House Bill 1146 would ban employers from punishing employees who accept cash tips from patrons of the business. This would block employers from demoting, firing or otherwise reprimanding employees for accepting tips. 

The bill passed its first committee vote on Thursday. 

"We need to get back to being a society that encourages good service and good work," said bill sponsor Rep. Alex Valdez, D-Denver. "We want to make sure that doesn't disappear in our cash-strapped economy." 

Valdez said many of the employees who are forbidden from accepting tips work service-related minimum wage jobs, earning only $13.65 an hour. While this is among the highest minimum wages in the country, Valdez said it is "still not enough to make a living in my district and in many parts of the state."

Colorado's housing market ranks in the top five most expensive in the nation, and recent rises in costs of living from energy to groceries have left 40% of Coloradans in worse financial positions than years past, according to the Colorado Health Foundation. 

The House Business Affairs and Labor Committee approved the bill in a 9-2 vote on Thursday, advancing it to the House Appropriations Committee for further consideration. 

Democrats stood united in support of the bill, while Republicans were split, with two Republican committee members voting in favor of the bill and two voting against it.  

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Rep. Ron Weinberg, R-Loveland, raised concerns about the potential public health risks of encouraging the use of cash. 

"The one real thing I learned through COVID was that the No. 1 spreader of any disease is cash," said Weinberg, who voted against the bill on Thursday. "Anytime somebody's sick, it lives on that note and we're just going to increase that seven fold." 

While many businesses stopped accepting cash payments at the beginning of the pandemic, recent studies have found no risk of transmitting COVID-19 through cash, concluding that the virus is almost immediately nonviable if deposited on a banknote. In 2021, Colorado passed a law requiring retail businesses to accept cash in response to this information. 

Rep. Rick Taggart, R-Grand Junction, backed the bill. A long-time professor at Colorado Mesa University, Taggart said several of his students work jobs in which they cannot accept tips, causing them to struggle financially. 

"I find that objectionable," Taggart said. "They're trying to make ends meet at the university. They are out in the elements delivering bags to folks who don't want to be standing out in the elements, and they want to reward them." 

The bill would not prohibit employers from requiring employees to share or allocate cash tips to other employees in pre-established tip pools, or from requiring employees to report tips. 

The bill will face its second vote in the House Appropriations Committee in the coming weeks, though a hearing date has not yet been scheduled.