Nov 30, 2022 - News

Price hikes and service fees on the way as I-82 takes hold in D.C.

A waiter delivers food to customers at a D.C. restaurant.

Dining out in D.C. might become more expensive. Photo: Saul Loeb/AFP via Getty Images

Nearly a month after D.C. voters approved a ballot measure upending how tipped workers are paid, employers are grappling with how they'll adapt.

Why it matters: Initiative 82, which goes into effect early next year, is pushing some restaurant owners to consider adding service fees, which would mean an increase in your bill is coming.

Catch up quick: Under I-82, employers of tipped workers will have to pay employees D.C.'s full minimum wage (currently $16.10 per hour) by 2027 regardless of how much workers make in tips.

  • In early 2023, the required minimum pay will rise from $5.05 to $6 and will increase incrementally to the standard minimum wage by 2027. 

Driving the news: Restaurant owners have begun pushing for legislation that would exempt service fees from sales tax, DCist reports

  • Service fees are already unpopular among customers and can discourage them from tipping. Making them tax-exempt would stop dining out from getting even more expensive.
  • DC Council chair Phil Mendelson says he is open to working on legislation to address business owners' concerns, per DCist. 

What they're saying: Hank's Oyster Bar owner Jamie Leeds told Washingtonian she won’t open another restaurant in D.C. because of the initiative. 

  • She added that if she decided to offer lunch service, she'd consider an online system where customers order without a server and a runner delivers meals to their table.

1310 Kitchen & Bar owner Jenn Crovato is considering increasing menu prices, adding a service charge, and reducing front-of-house staff by having customers use QR codes to order. But she wants to take these steps slowly to see how customers react.

  • Crovato employs about 31 people at her Georgetown restaurant but says it may not be feasible to keep them all once the hourly wage increases. She estimates that her servers currently make about $43 per hour. Her bussers make around $27 per hour. 
  • If things don’t work out, Crovato says she’ll have to close. “If it’s a lose-lose for all of us, I may as well shut down and do something else.”

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