DC restaurant workers, advocates rejoice over tipped minimum wage, owners have questions
WASHINGTON (7News) — After D.C. voters opted on Election Day to boost pay for tipped workers, restaurant owners are having reservations.
Under current law, the minimum wage for tipped workers is $5.05 per hour, with employers paying the difference if the servers' tips don't get them to the $15.20 minimum wage for non-tipped workers. That payment of the difference by employers is known as the tip credit.
READ MORE: Controversial proposal to change pay for tipped workers approved by DC voters -- again
On Tuesday, voters approved Initiative 82, which will gradually increase the tipped worker minimum wage by $2 per hour each year until 2027, when the new tipped minimum wage will also be $15.20 like it is for their non-tipped counterparts.
Sophie Miyoshi has worked on and off in restaurants for most of her life, and is now a lead organizer Restaurant Opportunities Center of D.C. She said this will change the landscape for restaurant workers in the District.
"It's a huge win for restaurant workers in D.C. We're super excited and super proud and relieved," Miyoshi said.
The nation's capital joins Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington in having tipped and non-tipped employees have the same minimum wage.
Miyoshi said it will be a relief for so many workers to not be at the mercy of customers in order to make a living wage.
“It’s never a good feeling to be so reliant on customers,” Miyoshi said. "Being a woman in the industry, there was a lot of sexual harassment I had to endure and face. I didn't feel comfortable speaking up about it or addressing it with the customer because they were the ones paying my wages."
While restaurant workers rejoice, owners have questions.
Restaurant Association Metropolitan Washington Interim Executive Director Julie Sproesser provided 7News the following statement:
The passage of initiative 82 brings with it many uncertainties during what is already a challenging economic period. We are working hard to evaluate how elimination of the tip credit will affect our industry and how we might best prepare our members for its implementation.
Mark Bucher is one owner with mixed feelings about the initiative. He is a co-owner of Medium Rare, and said this vote sent a message to the industry.
"I think it's the right topic to talk about," Bucher said. "I think the restaurant industry hears the wake-up call loud and clear. This is an industry built on the backs of labor. We need to treat labor right. We need to pay them right, and offer them careers and career paths to do it."
However, he said he is also worried about the bottom line, not just for himself, but for his employees.
Bucher said the new minimum wage will raise the cost of labor to the point that many restaurants will need to add a service charge, which he fears could lead to people being less generous with tips.
"The math is the math, the sales is the sales. There's nowhere to absorb it. You can't raise prices enough to justify this change," Bucher said. "D.C. is a 10 % sales tax jurisdiction. A service charge, which is going to have to happen now and be added to checks because the gap is going to have to get made up somewhere, is subject to sales tax. That $20 drink in D.C. is now $24.60. Where are you going to drink? You're going to go to Virginia. You're going to go to Maryland. You're not going to go to D.C."
While everyone in the industry is still digesting the approval of the initiative, the new requirement likely will not go into effect until the new year.
When voters pass an initiative, the vote must first be certified, which could take weeks.
After that, the initiative must go through a 30-day review in Congress. Once Congress rubber-stamps the initiative, then it becomes law.
This initiative may take longer than normal because of the transition within Congress. According to a memo, the council will not send any measures to Congress because they don't have enough session days before the end of the year.
However, Miyoshi and other advocates are following this process closely because of what happened to an almost identical initiative four years ago.
In 2018, D.C. voters passed a measure that would have made minimum wage for tipped and non-tipped workers identical. However, D.C. Council approved a repeal shortly after.
If the council wanted to do the same, they would have to wait for the entire process in front of Congress to play out to even introduce another repeal.
However, there doesn't appear to be a desire for a repeal repeat.
7News reached out to five of the seven council members who voted in favor of the 2018 repeal and are still on the council.
Chairman Phil Mendelson spokesperson Lindsey Walton provided the following response:
The Chairman does not have a formal statement, except to say he does not have any intention of introducing legislation that would change the certified result of the Initiative. He can not speak for his colleagues.
Ward 7 Councilmember Vincent Gray spokesman Charles Thies told 7News the councilmember also does not have any plans to introduce a repeal. He also said everything is hypothetical now, but there has been no discussion among other members for this action, but Gray expects everyone to consider what's on the table and vote for what's best for their constituents if a proposal were to come about this. However, Thies said the councilmembers are all aware of the blowback from the repeal of Initiative 77.
Restaurant workers and advocates are watching the next few months closely.
"I think there will be some questions around roll-out," Miyoshi said. "We'll have to keep our eye on it to make sure it follows through fully."
As the process to enact the new minimum wage continues, owners like Bucher will be working on how to adjust to the new costs.
Bucher said he believes pay should increase, especially when considering the rising cost of living, but he thinks that should not be the responsibility of the city.
"Let's raise the federal minimum wage. All for it. Let's continue to raise it. All for it," Bucher said. "Make a restaurant job a job people want, not need."
In the meantime, Miyoshi said the concerns about blowback for tipped workers once the new minimum wage is in effect pales in comparison to the benefits.
"I think overall, it will lift the floor for folks who are making less, and that is where we’re most concerned,” Miyoshi said. "Issues with service charges is something we're going to have to just keep our eye on and continuing if we need to pass further legislation to make sure service charges are not misused by employers."