• Labor & Employment
• Local Government

The bill introduces new requirements for local governments that enact minimum wages above the state’s minimum wage, particularly regarding tip offsets for food and beverage employees. Here are the key provisions:

1. Requirement for Local Governments:

• By September 1, 2025: Local governments that have already enacted a minimum wage higher than the state’s must enact a tip offset ordinance for food and beverage employees. This offset must:
  • Equal the difference between the local minimum wage and the state minimum wage, plus the state’s $3.02 tip offset.
  • Take effect by October 1, 2025.

2. Tip Offset Rules for New Ordinances:

• From September 1, 2025, to October 1, 2026, any local government enacting a new minimum wage higher than the state’s must also enact a corresponding tip offset ordinance that meets the same criteria:
  • Tip offset = Difference between local and state minimum wage + $3.02.

3. Changes After October 1, 2026:

• Local governments may enact or change the amount of the tip offset after October 1, 2026.
• However, there are restrictions:
  • Tip offset cannot be decreased to below $3.02.
  • Decreases in the tip offset cannot exceed 50 cents in any 12-month period.
  • The tip offset cannot be increased in a way that allows employees to be paid less than the state minimum wage minus $3.02.

The bill aims to standardize and adjust the tip offset for employees in local jurisdictions with minimum wages higher than the state’s. It ensures that the offset reflects the difference between local and state wages and establishes rules for modifying the offset after 2026, with limitations on reducing or increasing it beyond certain amounts.

Current law allows a local government to establish local minimum
wages in excess of the statewide minimum wage established in the state
constitution. A local government that enacts a minimum wage must
provide a tip offset for tipped employees in an amount equal to the tip
offset amount described in the state constitution, which is $3.02.
The bill requires a local government that has enacted a code or an
ordinance imposing a minimum wage that exceeds the state minimum
wage to enact another code or ordinance on or before September 1, 2025,
that:
  • Imposes a tip offset for food and beverage employees in an
amount that equals the amount by which the local minimum
wage exceeds the state minimum wage, plus $3.02; and
  • Takes effect on or before October 1, 2025.
After September 1, 2025, and until October 1, 2026, a local
government that enacts a code or an ordinance that imposes a minimum
wage in an amount that exceeds the amount of the state minimum wage
must also enact a code or an ordinance that imposes a tip offset in an
amount that equals the amount by which the local minimum wage
exceeds the state minimum wage, plus $3.02.
On and after October 1, 2026, a local government may enact a
code or an ordinance that increases or decreases the amount of the local
tip offset; except that a local government may not enact a code or an
ordinance that:
  • Decreases the amount of the tip offset to an amount less
than $3.02;
  • Decreases the amount of the tip offset by more than 50
cents in any 12-month period; or
  • Increases the amount of the tip offset by an amount that
would allow an employee to be paid a wage that is less than
the state minimum wage, minus $3.02.

• April 10, 2025: Senate Local Government & Housing Committee Report
• March 14, 2025: House Finance Committee Report
• February 20, 2025: House Business Affairs & Labor Committee Report

• Past bill versions
• Past fiscal notes
• Committee activity and documents
• Bill History