Denver Mayor Proposes 20% Restaurant Fee to Help Struggling Businesses

Denver Mayor Proposes 20% Restaurant Fee to Help Struggling Businesses

Denver Mayor Mike Johnston is considering a 20% service fee on restaurant bills as an alternative to a traditional tip offset, aiming to help restaurants struggling with higher minimum wages. The proposal, discussed on the City Cast Denver podcast, comes in response to a Colorado bill that requires cities with a minimum wage above the state level to implement an additional wage policy by September 2025. Instead of a tip offset, which reduces wages by the difference between local and state minimums, Johnston’s plan would impose a 20% service charge on all restaurant tabs, effectively shifting labor costs directly to diners.

Under this proposal, a $100 meal would cost $120 before tax, and the city would tax the full amount, later redistributing a portion of the collected tax back to restaurants. Johnston argues this would allow businesses to stay afloat after nearly 400 restaurant closures in recent years, many of which struggled with rising wages and operational costs. Supporters of the plan believe it could provide financial relief for restaurants, but critics argue that it could discourage diners and create confusion over whether customers should still tip on top of the added fee.

While details of the service fee vs. tip offset debate continue to unfold, concerns remain about how this will impact restaurant employees and customers alike. If enacted, Denver restaurant-goers may soon see a significant increase in their dining costs, and businesses will have to navigate customer reactions and possible changes in tipping culture. The policy is still under discussion, but Denver residents should prepare for potential shifts in how they pay for meals at their favorite restaurants.