Mayor Bowser seeks repeal of I-82 amid restaurant crisis
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Mayor Muriel Bowser proposed Monday to repeal Initiative 82 — the controversial law, now nearly three years in effect, that eliminates D.C.'s tipped minimum wage.
Why it matters: This marks a turning point in the years-long battle over how and how much tipped workers are paid — a fight that's changed the local restaurant industry and, some say, contributed to unprecedented closures and job losses.
State of play: Bowser unveiled part of the economic vision for her 2026 budget Monday, which includes big bets on sports, tech and entertainment.
- She wants to better support D.C.'s restaurants by restoring the tipped minimum wage and creating sales tax holidays for restaurants.
- I-82's repeal requires approval from the D.C. Council.
What she's saying: "We think our restaurants are facing a perfect storm with increased operational and supply costs, higher rent, and unique labor challenges," Bowser said at a press conference.
- "We know the city must rebalance our system to ensure our restaurants can compete, survive, grow and employ D.C. residents," said Bowser, adding that the proposal wasn't "arrived at lightly."
Catch up quick: Voters overwhelmingly passed I-82 in 2022. It eliminates the tipped minimum wage by incrementally increasing the base pay for tipped workers until it reaches the citywide minimum wage (currently $17.50/hour) by 2027.
- It's been a decades-long battle. Labor advocates say I-82 has led to higher wages and fairer practices. Many businesses argue it's been hugely detrimental, and hospitality workers fall on both sides.
- Washington's restaurant association is pushing for a full repeal, setting back the tipped minimum wage to around $5.
By the numbers: The tipped minimum wage is currently $10/hour. It's poised to jump to $12 in July — which opponents say will be a "tipping point" for small businesses.
- The proposed legislation would set the tipped minimum wage back to $5.95 from the current $10, taking effect Oct 1.
Previously, it was common practice in the DMV and much of the U.S. for tipped employees to be paid a lower base salary, assuming tips would meet — and often surpass — minimum wage. If not, businesses are legally required to pay and make them whole.
Zoom in: D.C. Council Chair Phil Mendelson reacted positively to the mayor's proposal; he led the council to overturn a similar ballot initiative in 2018.
- Mendelson told journalists on Monday that he's heard from some workers who make less income due to diners' tipping less. "I really don't know who's benefitting from this."
But, he added: "I don't think the support is there on the council" to repeal it again.
Meanwhile, labor advocates like Unite Here Local 25, a local union that says it represents 7,000 DMV hospitality workers, plan to rally against the repeal on Tuesday.
- "If the industry is in crisis, the Mayor and Council should take up freezing rents or taxing successful corporate restaurateurs to create a hardship fund for struggling D.C. restaurants," Paul Schwalb, the union's executive secretary-treasurer, said in a statement to Axios.
- "But a wage cut is a non-starter."
What we're watching: Service charges will inevitably become part of the conversation, said Sean Townsend, head of the restaurant association.
- The fees legally belong to the business — unlike employee tips — but in the wake of I-82 are increasingly used to cover employees' wages and other expenses.
- "Whether or not we need to get rid of service charges, or cap them lower [than 20%] — I'm not opposed to having those conversations to keep things moving forward," Townsend said.