Washington D.C. may become the next local government to require that restaurants pay minimum wage to its servers, bartenders, and any other workers who currently earn a “tipped wage” – a lower base wage, plus tips. Presently, that base wage is $3.33 per hour.
Under the current law in the District of Columbia, the tipped wage (base wage earned plus tips) must reach at least the minimum wage – now $12.50 per hour. If not, employers must make up the difference.
On March 7, the D.C. Board of Elections certified a ballot measure that would gradually phase out the tipped wage law. Initiative 77, which will appear on the June 19 ballot, seeks to eliminate the tipped wage and would instead require restaurant employers to pay tipped employees the prevailing minimum wage. Therefore, if Initiative 77 passes, the base wage of restaurant employees would incrementally increase until 2026 when all restaurants in the District of Columbia would be required to pay the same minimum wage as all other workers in the District earn.
Should the initiative pass, D.C. will join Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington state – and several cities – that pay all employees a single minimum wage. Given recent voter trends, it appears that D.C. voters will pass the initiative as the city has become increasingly less business-friendly in recent years.
Restaurant owners and trade associations oppose the initiative, citing potentially devastating consequences for the restaurant industry – which is dominated by small business owners and has low profit margins. Critics also argue the consequences will not only affect the restaurant owners, but also employees and customers – leading to reduced hours and smaller staff, higher menu prices, and service charges.
However, proponents argue that other cities and states that have implemented similar policies have not experienced lower wages or diminished profits. Moreover, proponents also assert that the initiative seeks to help lower-income tipped wage employees, as bar and restaurant workers are significantly more likely to live in poverty. It also aims to protect restaurant workers that neglect to tell their employer their tips came up short in fear of retaliation.
Interestingly, advocates have also recently argued that, in the wake of the momentum of the “Me Too” movement, Initiative 77 will reduce sexual harassment that can stem from a tipped wage system, since servers and bartenders will not have to tolerate inappropriate behavior from customers to earn a better tip. In response, restaurant owners note the lack of evidence to suggest a connection between tips and sexual harassment.
Initiative 77 will be in the hands of D.C. voters on June 19. Stay tuned for developments as we monitor the results of the upcoming election, and provide additional information as it becomes available.