Should workers who get most of their earnings from tips be entitled to the same minimum wage — directly from their employers, not withstanding any gratuities — as those who do not receive tips? With Initiative 77, District residents will decide this question come the June 19 primary election. All registered voters are eligible to vote on the initiative, even independents who cannot participate in the party primaries.
Tipped workers in the District currently receive a minimum wage of $3.33 from their employers, a figure that is due to rise to $5 by 2020 under current law. By statute, if the workers’ tips do not bring them up to the standard minimum wage (currently $12.50, but due to reach $15 on July 1, 2020), their employers must make up the difference.
To ensure compliance, establishments must file quarterly reports on tipped workers’ incomes. If an employee’s total income is less than the minimum wage, the District will fine the employer. If this happens repeatedly, the business could lose its operating license.
Should the initiative pass and tipped workers’ wage levels increase, many servers and bartenders could end up with considerably more than other minimum wage workers if the tips they receive remain constant. On the other hand, if restaurant and bar patrons decide the new law justifies lower tips, servers could lose out.
From all the evidence we have seen, raising the wage level will result in higher prices since restaurant and bar owners will be spending more out of pocket. Many restaurateurs are likely to add a “service charge” to their bills, which would discourage patron tipping. Many are also likely to reduce their wait staffs, as has occurred elsewhere after implementation of similar measures.
Here in the District, most tipped workers receive far more than the minimum wage when tips and pay are combined, though that is often not true in some mom-and-pop establishments where customer bills and gratuities tend to be smaller.
Proponents of the initiative have raised some legitimate issues — such as the failure of a few employers to follow existing law — but we believe the District can address many of these concerns through better enforcement. At this point, we don’t think it’s wise to create tremendous uncertainty for the many restaurant and bar workers who say they do quite well under the current practices and vocally oppose this change. Voters ought to reject Initiative 77.