D.C. Council pauses Initiative 82 tipped wage increase
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Arguing that restaurants are facing tough times, the D.C. Council paused the next phase of Initiative 82, weeks ahead of a scheduled rise in the tipped minimum wage.
Why it matters: Lawmakers voted 8-4 Tuesday to freeze the wage increase while it considers a full repeal of the law — as sought by Mayor Muriel Bowser and the restaurant industry.
State of play: The tipped minimum wage will stay at $10 per hour and not rise to $12 on July 1, as was mandated in the ballot initiative.
- Council members supporting the pause argued that it does not change the fact that servers, bartenders and other tipped workers are still entitled to the District's full minimum wage. If a worker doesn't receive enough in tips, the business has to pitch in the difference.
- The city's hourly minimum wage for all workers is scheduled to increase from $17.50 to $17.95 on July 1.
Between the lines: Initiative 82 has been controversial at City Hall and in the hospitality world. And with restaurants imposing service fees to help cover costs, it's sparked confusion among diners.
- But there's been plenty of support at the ballot box: 74% of District voters approved it less than three years ago. A predecessor initiative passed in 2018, but the D.C. Council stopped it from taking effect.
- This time, council members said they are intervening because of inflation squeezing independent restaurants, diners spending less, and uncertain tariffs.
Also on lawmakers' minds: Congress is considering removing federal taxes on tips up to $25,000 for people making $160,000 or less.
- Several council members said they want to see how that proposal shakes out in the months ahead before moving forward.
What they're saying: The three-month pause "allows the council to fully consider the data and the impact on our local restaurant industry," said Council member Kenyan McDuffie, urging colleagues to vote in favor.
The other side: "Voters have now passed this twice," Council member Brianne Nadeau said. "A pause is not respecting the will of the voters."
Zoom out: Bowser is pushing for a complete repeal through her budget proposal, but there may not be enough support on the council.
- Council members Christina Henderson and Charles Allen voted for the pause, but said they don't support overturning I-82.
Catch up fast: Initiative 82 incrementally increases the base pay for tipped workers until it matches the citywide minimum wage by 2027.
- Labor advocates say I-82 has led to higher wages and fairer practices. Many businesses argue it's been hugely detrimental.
- Some hospitality workers say they used to make more money off tips before I-82, and that now customers may be less likely to tip generously because of service fees.
- Washington's restaurant association wants a repeal to set back the tipped minimum wage to around $5.
What's next: The council appears open to tweaking the implementation of the initiative — or scrapping it entirely if Congress passes the no-tax-on-tips provision.