The Washington, D.C., metropolis council convened on Wednesday to debate the FY 2026 price range. One of many subjects on the council’s agenda was reviewing proposals to repeal Initiative 82, the District of Columbia Tip Credit score Elimination Act of 2022, which has harm the district’s restaurant business and employees since its enactment.
Initiative 82 handed with 132,925 votes in favor—practically three-quarters of the voters—in November 2022. Earlier than the passage of the initiative, all employees within the district, together with tipped employees, had been entitled to a minimal wage of $15.20 per hour. Employers of tipped employees, nevertheless, had been allowed to credit score their staff’ ideas towards satisfying this requirement, and had been required to offer their employees with a considerably decrease obligatory base pay of $5.05 per hour. The initiative proposed to extend the obligatory base pay to tipped employees till it equaled the district’s minimal wage, completely phasing out the tip credit score.
On Could 1, 2023, the Tip Credit score Elimination Act elevated obligatory base pay to $6 per hour. That determine elevated to $8 per hour in July 2023 and to $10 per hour in July 2024. The act prescribed a July 2025 improve to $12 per hour, however on June 3, the town council voted to pause this improve till October. Councilmember Kenyan R. McDuffie (I–At massive) mentioned he launched the pause out of concern for a way the act has impacted the restaurant business, reviews NBC 4 Washington. Councilmember Robert C. White Jr. (D–At Giant) voted in assist of the pause after talking to 150 restaurant employees who informed him that “[their] take-home pay has decreased,” in response to The Washington Put up.
Jennifer Budoff, Washington’s price range director, dismissed such considerations in a current report, claiming that the town’s restaurant business “stays wholesome” following the enactment of Initiative 82. Mayor Muriel Bowser, a Democrat, disagrees. Bowser’s FY 2026 price range proposal, launched to the general public on Could 27, calls on the town council to “repeal Initiative 82 & set up gross sales tax holidays for eating places” as a part of her name to chop purple tape and cut back boundaries to development. Employment and earnings knowledge assist Bowser’s considerations.
Rebekah Paxton, director of analysis on the Employment Insurance policies Institute (EPI), tells Purpose that the district has misplaced over 1,600 full-service restaurant and bar jobs, on internet, between Could 2023 (when the act took impact) and December 2024, the most recent month for which the Bureau of Labor Statistics Quarterly Census of Employment and Wages (QCEW) knowledge can be found. The QCEW knowledge put this quantity in perspective: Eating places using tipped employees within the Virginia and Maryland counties surrounding Washington skilled an employment decline of 0.84 % from Could 2023 to December 2024, whereas the district witnessed a decline of 4.74 % throughout the identical interval, in response to Paxton’s testimony to the town council on Wednesday. The decline of employment within the metropolis’s eating places that don’t make use of tipped employees was practically one proportion level decrease than that of its full-service eating places, Paxton testified.
Not solely has full-service restaurant and bar employment decreased, however so have earnings. Complete employee earnings decreased by practically $12 million {dollars} from $345.6 million in Could 2023 to $333.8 million in September 2024, in response to EPI’s evaluation of QCEW knowledge. Paxton says “the median tipped employee in DC is dropping about $1800 a 12 months” within the two years following implementation of the act in comparison with the 2 years previous, in response to her evaluation of U.S. Census Bureau Present Inhabitants Survey (CPS) knowledge.
Regardless of the progressive intentions of the act’s supporters, Paxton’s testimony particulars that the discount in earnings has been borne disproportionately by the underside quartile of tipped employees, who’ve misplaced $3,400 in median yearly earnings from Could 2023 to December 2024, per CPS knowledge. The information present that the elimination of tipped wages in Washington, D.C. has been a catastrophe for the native restaurant business. Hopefully, the town council is listening.
