Tipped-Employee Initiative Passes. Now What?

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Courtesy Restaurant Association of Metropolitan Washington.

The primary election in Washington, D.C., is over and the only really controversial issue on the ballot has been decided. Initiative 77, making it District law to guarantee every full-time employee a minimum wage of $15 an hour by 2025, passed 55 percent to 45 percent.

This includes tipped employees — mainly waitstaff and bartenders — whose minimum hourly wage at present is $3.33. They are, however, guaranteed a minimum hourly wage of $15. Most of the $15 is to come from tips first. At the end of the month, if accounts show they have not made $15 an hour based on credit card receipts, employers are obliged to pay them the balance.

Georgetown voters voted against the initiative 59 percent to 41 percent.

As reported earlier in The Georgetowner, many tipped employees here were against the initiative, as were their employers — almost all independent restaurants, bars and cafes as opposed to national chains. Tipped employees in Georgetown tend to earn far above $15 an hour from tips (some make six figures).

The concern was that if their employers were required to add a surcharge on the menu to cover the guaranteed salary, customers would stop tipping, believing it to be unnecessary. Some restaurants claimed they would have to close if the hourly minimum wage was increased.

But the overall vote for the initiative in Ward 2 was almost exactly split: 3,771 “no” to 3,748 “yes.”

Now the issue moves to the District Council, which has the authority to void any initiative. Ten of the 12 Council members were on record opposing the measure before the primary election.

As early as election night, Kathy Hollinger, president and chief executive of the Restaurant Association of Metropolitan Washington, said she began talking about a repeal with Mayor Muriel Bowser, Council Chairman Phil Mendelson and members Charles Allen of Ward 6, Kenyan McDuffie of Ward 5 and Brandon Todd of Ward 4 (all Democrats).

By Wednesday morning, June 20, after the vote, a small cadre of initiative proponents held a demonstration on the steps of the John A. Wilson building, demanding that the Council respect the results of Tuesday’s election.

“You need to stand by and lift up democracy rather than tear it down through your own whims and your own campaign contributions and those folks that you think you are aligned to,” said the Rev. Graylan Hagler, an organizer with the Poor People’s Campaign, reported the Washington Post. “You’ve got to be aligned to the voters in the District of Columbia, because that is what democracy means.”

But making a voters-choice argument could be problematic.

Overall in the District, fewer than 15 percent of registered voters actually cast ballots in person or absentee. In Georgetown, it was less than 12 percent. That is lower than almost any primary election to date (primaries tend to have far lower voter turnout than general elections). This raises the question if an initiative such as 77 should even be on a primary ballot.

“Most voters weren’t even sure what they were voting for,” Hollinger stated.

The matter is not settled. Initiative 77 could be voided by the Council. Or it could be implemented with the final goal of a $15-an-hour minimum wage for all not taking effect for eight years. Or a compromise could be worked out.

What impact it will have on tips remains to be seen. Several Western states — California, Oregon and Washington — that implemented the “Fair Wage” law in the last three years have claimed no effect on tips. But most analysts say it is too early to tell.

The District obviously is different. Most tipped employees in the District work in small locally-owned establishments, not chain restaurants that are the target of the Restaurant Opportunities Centers (ROC) United, a national advocacy organization.

“If our good tipped employees can’t earn tips, they can easily go work in Maryland and Virginia a couple of miles away where they can get tips,” said Billy Martin, owner of popular Georgetown restaurant and bar Martin’s Tavern.

An online “Save Our Tips” petition is now being circulated to “Continue the fight – bring 77 to City Council!” Click here to view the petition.

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