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What Goes into Effect in 2026: Labor & Regulatory Updates for Restaurants

By December 4, 2025January 15th, 2026No Comments

Minimum Wage & Tipped Wage Updates 

New minimum wage laws go into effect on Jan. 1, 2026. Below is a list of all state and local minimum wages: 

  • State Minimum Wage: $15.16/hr
    • State Tipped Minimum Wage: $12.14/hr ($15.16 – $3.02 tip credit) 

Local Minimum Wages: 

  • Edgewater Minimum Wage: $18.17/hr
    • Edgewater Tipped Minimum Wage: $13.50/hr ($4.67 tip credit)
      Note: On December 16, 2025, Edgewater City Council voted to raise their tip credit from $3.02 to $4.67. (See more below, under HB25-1208) 

HB25-1208 – Local Tip Offsets:

This bill protects the state’s existing $3.02 tip credit while allowing local governments the authority to increase their tip credit if they pass a higher minimum wage than the state’s.

Edgewater is the first city primed to take advantage of the new state law. When their ordinance passed into law on January 1, Edgewater’s tip credit increased to $4.67 per hour. The Edgewater minimum wage increased to $18.17 in 2026, but the higher tip credit keeps the tipped minimum wage at $13.50 per hour, providing needed relief for restaurants.

Compliance tips: Monitor state and local wage updates and change your minimum wage rates as needed.

Other Key 2026 Legislative Updates that Will Affect Restaurants in 2026

HB25-1001 – Wage & Hour Enforcement Expansion

This law increases penalties for noncompliance, expands the definition of “employer,” gives state and local agencies more ability to investigate and act on wage complaints, and strengthens enforcement for wage violations and worker misclassification.

Compliance tips: Review, audit, and document wages, and never pay less than minimum wage.

  • Review how you classify workers; avoid cataloging workers as independent contractors

  • Audit tip and hourly-wage accounting and tip-credit offsets

  • Ensure deductions never reduce pay below your local minimum wage

  • Document everything (hours, tips, tip-pooling, pay stubs, payroll deductions, final paychecks, etc.)

HB25-1090 – Mandatory Service Fee Disclosure Requirements

The CRA successfully secured amendments to allow mandatory service fees to continue at all food and beverage establishments without impacting menu prices. Mandatory service fees remain permitted but must be clearly disclosed, including how the fee is used. Disclosures must be easy for customers to notice and understand, regardless of where it’s posted (e.g., sign at the bar, sign at register, language on menu, etc.) and how the order is placed (online, phone, or in person).

Note: Regardless of what the mandatory charge is called (i.e.: kitchen fee, large-party auto-gratuity, service charge, service fee, etc.), so long as it is a mandatory charge that is automatically added to a customer’s bill, it is considered a “service charge.”

Compliance tips:

There are two primary actions you need to take:

  1. Relay the amount of the service charge to your customers in a clear, obvious place where the customer can see it; for example, printing on menus and receipts or having a sign displayed at the cash register.
  2. Explain in simple terms how the charge is distributed/what the charge is for.
    • The verbiage explaining the service charge can be as simple as “This establishment adds a 20% service charge to all checks, which supports our staff, fluctuations in costs, and business administration.” The language does not need to be elaborate, but it does need to state where the charge is going. You do NOT need to detail the percentage distribution of the service charge (ie, 5% to back-of-house, 10% to front-of-house, 5% to administration, etc.).
  3. The service charge must be disclosed to online- and phone-order customers, as well. Online orders should have a digital banner or a line item on the receipt (or something similar) that explains the charge and its purpose, and customers who place orders over the phone can be told verbally.

The Attorney General’s office is expected to complete rulemaking on this new law in 2026. The CRA will keep members informed on any changes.

SB25-285 – Food Establishment Inspection Fee Increases

This bill increased retail food establishment license fees over a three-year period (25% in 2026, 20% in 2027, and 20% in 2028).

Compliance tips: Budget for higher inspection/permit fees, research costs for expansions and remodels, and review your fee payment schedule.

HB25-1295 – Food Truck Licensing Reciprocity

This bill makes it easier for food trucks to operate across different cities and counties by creating a shared, streamlined licensing system. Food trucks must still maintain required fire and food safety permits, and local governments can continue enforcing their own rules and regulations.

Compliance tip: Maintain active permits, track renewal dates, and review local zoning and safety rules if expanding routes.

HB25-1010 – Price Gouging Prohibition During Emergencies

During a declared emergency, restaurants may not raise prices on essential goods or services more than 10% above the 90-day pre-emergency average, unless justified by increased costs.

Compliance tips: Keep detailed records of your historical pricing, costs, and supply chain disruptions in the event that you need to justify price increases.

HB25-1239 – Modification of Colorado Anti-Discrimination Act

This bill increases fines and penalties for disability-related discrimination from $3,500 to $5,000 for each defendant for each violation. This does not change what counts as discrimination under the Colorado Anti-Discrimination Act.

Compliance tips: Review and update any anti-discrimination policies to ensure they comply with state and local disability laws.

  • Review ADA compliance

  • Train staff on accommodation practices

  • Audit physical and service accessibility

  • Prepare a plan to respond within the law’s 30-day “cure window”

SB25-169 – Restaurant Meals Program (RMP)

Colorado will submit its application to join RMP to the USDA on January 1, 2026. If approved, eligible SNAP recipients could purchase hot prepared meals at participating restaurants, although no timeline has been defined.

Compliance tips: No steps required now. If the program is approved and your business plans on participating, you will need to obtain state licensing and USDA authorization. The CRA will update members pending USDA approval.

If you have questions about how these updates apply to your business, remember that CRA members have access to a free 15-minute monthly legal consultation, and you can reach out to us at any time: info@corestaurant.org.

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