Initiative 82 passes, upending how D.C.’s tipped workers get paid
D.C.’s restaurant servers and other tipped workers will see the way they get paid shift in a profound way now that voters have passed Initiative 82, per the Associated Press.
Why it matters: I-82’s passage raises the minimum wage for tipped workers. Opponents say it’ll lead to an increase in restaurant service charges and fewer tips.
What’s happening: Employers of tipped workers will have to pay employees at least D.C.'s minimum wage (currently $16.10 an hour) by 2027 regardless of how much the workers make in tips.
- Under the old system — which is still used in most places across the country — employers could pay their tipped staff less than minimum wage as long as their tips covered the difference.
Between the lines: Much of the local restaurant industry, including the Restaurant Association of Metropolitan Washington, is against I-82 and believes it’ll hurt small businesses and tipped staff.
- The initiative doesn’t take away customers' ability to tip, but the likely addition of service fees that business owners would use to increase pay could discourage customers from wanting to leave behind extra cash.
What they’re saying: RAMW interim executive director Julie Sproesser issued a statement saying in part, “We are disappointed with its passage and the new reality that awaits our vibrant industry during a time of already challenging economic recovery. This measure will disrupt our city’s hundreds of small and independently owned restaurants and limit the earning potential of tipped employees, while also having regional repercussions.”
- One Fair Wage (a national nonprofit that led the charge in pushing I82) president Saru Jayaraman released a statement saying in part, "One Fair Wage is ecstatic that voters in D.C. once again confirmed what we have always known: that most people in America, regardless of their political affiliation, agree that everyone who works deserves to be paid a livable wage that allows them to feed their families and stay and work in DC."
Threat level: Ashok Bajaj – owner of Rasika, Bombay Club, and others – says he’s concerned about losing servers to jobs in Maryland and Virginia. The restaurateur estimates that his servers make anywhere from $30 to $50 an hour.
Chef Amy Brandwein, owner of Piccolina and Centrolina, says the initiative is poorly timed considering many restaurants are just starting to rebound from pandemic losses.
- She hasn’t implemented service fees during the pandemic but told Axios she would if the initiative passed, and believes other D.C. restaurant owners will do the same.
- Brandwein estimates that her tipped staff currently make around $45 to $60 an hour.
Zoom out: D.C. joins a handful of states (including Washington, California, and Oregon) that require employers to pay tipped workers the minimum wage regardless of their tips. Most have been operating under this system for decades.
In Seattle, the minimum wage is $17.27 an hour (although smaller employers who offer $1.52/hour in benefits or whose employees make at least $1.52/hour in tips can instead pay $15.75/hour).
- On average, restaurant servers in the area end up making more than minimum wage, at an average of $22.64/hour, per the Bureau of Labor and Statistics.
- Tipping habits vary and so do the ways restaurants handle them. Tip pools (in which tips are split among staff members), automatic gratuity, and service charges are all common for area restaurants.
What’s next: D.C. restaurateurs tell Axios it’ll take time to decide how to handle I-82’s new requirements.
Editor's note: This is a developing story. Please check back for updates.
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