Battle Erupts Over D.C. Tipped-Employee Wage
By May 14, 2018 0 2006•
A battle between restaurant and bar servers who want to keep earning tips on top of a minimum wage much lower than the one in effect for all other D.C. workers — currently $3.33 and $12.50 an hour, respectively — and those seeking minimum-wage parity has become an issue in the June 19 primary election. Initiative 77, which proposes to match the lower rate to the higher by 2026, is on the ballot.
In Martin’s Tavern, on the corner of Wisconsin Avenue and M Street, named the most popular restaurant in Georgetown several years in a row, servers, bar hosts and owner Billy Martin all sport buttons with #77 crossed out. “Save Our Tips” posters hang on the bar mirror and have been circulated to restaurants throughout Georgetown by concerned staffers.
But national advocacy organization Restaurant Opportunities Centers United sees it differently. ROC United, which proposed the initiative, is working to eliminate the tip-credit wage system for American restaurant workers, a system found mainly in the U.S. Its members are restaurant servers and bartenders who have direct customer contact. The tips they earn each day are counted as part of their guaranteed minimum wage. ROC United wants that system replaced by a set minimum wage of $15 for all restaurant workers no matter where they work, and is endeavoring to get it done state by state.
It’s complicated. Both sides make good points.
“Save Our Tips” proponents argue that restaurants guarantee that their tipped employees earn $15 an hour already through a combination of a set wage and tips, mainly those included on credit-card payments (the method by which 80 percent of customers pay their bills). “If the day’s take does not equal $15 an hour, the restaurant is required to make up the difference,” explained Martin.
“There are strong protections in place to make sure that tipped workers receive that minimum. But it’s almost never necessary. With tips, all of our front staff make far more than $15 an hour,” Martin said. “Some make six-figure annual incomes.”
But Martin’s Tavern is a popular, always crowded city tavern, full of history and atmosphere, tourists and regulars. Calling for “One Fair Wage,” ROC United argues that tipped workers at small local restaurants in other parts of D.C. and at franchised eateries cannot count on tips to reach a regular minimum wage of $15 an hour.
In addition, ROC United argues that the mostly female restaurant workers — about 80 percent, the organization estimates — who depend on tips are vulnerable to sexual harassment and gender bias: “Women restaurant workers living off tips and subminimum set wages are twice as likely to experience sexual harassment and three times as likely to be told by management to alter their appearance and to wear ‘sexier’ more revealing clothing than women in single-wage states.”
No one is claiming that customers will suddenly stop tipping if the $15-an-hour minimum wage for servers is established, at least not at first (unless, as in Europe, the menu so stipulates). But there can be other consequences.
“Many restaurants may increase the prices of their offerings to cover the fixed costs of wait staff,” Martin said. “Or some may add a surplus charge. Or have fewer wait staff.”
In addition, since the set wages of back-of-the-house workers (from cooks to dishwashers and clean-up staff) are much higher than servers because they don’t get tips, it could be that, as the set wage for servers reaches parity and they continue to get tips, their colleagues will demand more.
The change might also affect quality of service by reducing or eliminating the incentive that tipping provides. “I hire wait staff for their qualities as sales people, not just to hand out menus and take orders. Without tips, can I still get these quality people?” Martin asked.
Proponents of Initiative 77 claim that the seven states where the minimum wage for tipped employees has been raised have not felt those negative effects. “But that’s because the wait staffs have nowhere else to go. D.C. fronts several states where wait staff can still earn tips. There is no doubt that many who work in D.C. will just work in Virginia, Maryland, Pennsylvania or Delaware instead,” said Martin.
Some question why the initiative was forced onto a primary election ballot, which draws notoriously low interest and turnout (normally under 50 percent). “Even if the initiative does pass, the city council can overturn it,” Martin concluded. “No one seems to know that.”