Edgewater took a big step Tuesday toward decoupling increases in the city’s minimum wage from the lower wage collected by tipped workers, which would make it the first city in Colorado to take advantage of anew state law.

That law allows municipal governments that set their own minimum wages to create a bigger pay gap among restaurant positions — typically front of the house vs. back of the house — than the difference set by the state.

The vote by the Edgewater City Council on Tuesday was unanimous, and a second, and final, vote will be needed Dec. 16, before the ordinance takes effect Jan. 1.

By Colorado law, the minimum wage for tipped workers is pegged at $3.02 less than the standard minimum wage — meaning that when the standard minimum rises, so does minimum pay for servers and other tipped positions, even if those workers make more money with tips.

The restaurant industry has long complained that this requirement —put in place by state lawmakers nearly 20 years ago — burdens eateries with greater overhead at a time when dining establishments have been struggling to regroup in the wake of draconian shutdowns and restrictions placed on their operations during the pandemic.

For restaurants in Edgewater, Denver and Boulder — cities that have set their own minimum wages above the state threshold, currently $14.81 per hour — the mandatory linkage of the two classes of pay creates an upward ratchet effect that burdens businesses with extra labor costs.

In June, Gov. Jared Polis signed into lawa measure that would allow cities in Colorado to increase the gap between the tipped minimum wage and the standard minimum wage — a difference known as the “tip credit.” Boulder County also sets its own minimum wage.

If Edgewater’s measure gets final approval next month, the city’s hourly minimum wage willrise from $16.52 to $18.17 in the new year. But the tipped minimum wage will remain the same in 2026 as it is this year — $13.50 an hour.

That means the tip credit in Edgewater will rise from $3.02 an hour to $4.67 an hour — the first time that gap has been widened in Colorado. A memo accompanying Tuesday’s council meeting says the adjustment would last a year and “would give the city a year to develop a long-term approach that reflects the new state law and balances fair wages for tipped employees with the financial realities faced by local businesses.”

Councilwoman Joie Iten said Edgewater needs to look further down the road than just one year. Much of the discussion Tuesday night revolved around when elected leaders would set the tip credit for 2027 and beyond.

“This isn’t just something for next year and the year after,” Iten said.

Councilman Joel Newton called Edgewater’s measure “a unique ordinance for a unique time.”

“We’re talking about locally owned small businesses,” he said.

Absent any action from the council, Newton said, “we’re looking at restaurants closing.”

Nick Hoover, the director of government affairs at the Colorado Restaurant Association, hailed the move as providing “real relief” for restaurants.

“We are excited to see Edgewater taking the lead on this issue,” he told The Denver Post. “Restaurants are struggling with ever-increasing costs and declining sales, so we’re grateful that Edgewater City Council sees that and is making a move to help.”

Hoover hopes other cities in Colorado will do the same, although the option to adjust the tip credit is available only to cities and counties with a higher minimum wage than the state minimum.

In abill signing statement that was issued with his signature, Polis warned that if Denver, Boulder, Boulder County and Edgewater didn’t make use of the new law by lowering their tipped minimums, the legislature may address the issue once again next year — “this time more assertively.”

• Gov. Jared Polis signs much-amended restaurant tipped wages bill, adding: Your move, Denver.
• Colorado legislators rewrite restaurant bill, backing away from direct cut to servers’ pay in Denver
• Colorado restaurants would receive wage-related lifeline under proposed bill

Denver city spokesman Jon Ewing told The Post that city officials were “working toward addressing the challenges facing restaurants in the new year” but that there is “nothing in the works at this time” regarding a change to the tipped minimum wage credit.

Denver’s minimum wageis set to hit $19.29 an hour on Jan. 1.

A spokeswoman for Boulder, where the minimum wage isset to jump to $16.82 an hour in the new year, did not respond to a request for comment.

Last week, the Boulder County commissionersslowed future growth in the county’s minimum wage — which applies in unincorporated areas — after several business owners complained this year that thethreshold was jumping too quickly year to year. But the commissioners did not tinker with the wage credit during those discussions.

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