Restaurants’ Pickle: Inflation, Initiative 82, ICE Checks
By • May 12, 2025 2 694
Mayor Bowser Aims to Repeal Tipped-Wage Initiative
To eliminate one of several challenges faced by Washington, D.C., restaurant owners, Mayor Muriel Bowser announced on May 5 that her fiscal 2026 budget proposal would include repeal of the Increase Minimum Wage for Tipped Employees Measure. The ballot initiative — known as Initiative 82, I-82 for short — was approved by three-quarters of those who voted for or against it in the Nov. 8, 2022, election.
The stepwise process of I-82’s implementation has nearly doubled the minimum hourly wage for tipped workers to $10. That hourly wage is due to rise to $12 in July and to continue upward until it matches the standard minimum, currently $17.50, in 2027.
When workers’ tips fail to make up the difference, the business owner is required to do so, although “wage theft” is known to occur. On the other hand, if their improved wages discourage tipping, servers in upscale establishments may see their formerly substantial tip income drop (and perhaps leave the District for greener pastures nearby).
Adding to diners’ confusion and, often, resentment are the surcharges some restaurants have imposed to cover the rising minimum wage for tipped workers. One wonders: Does that surcharge go to my server? Am I supposed to tip 15 or 20 percent on top? Maybe, maybe not.
Pizzeria Paradiso’s message reads: “We apply a service charge of … 20% plus tax for dine-in purchases. This is not a tip. We no longer participate in the traditional tip system, allowing for more equitable and stable compensation for all of our staff. The service charge is used for general operations expenses including staff wages and benefits. Additional tips are no longer expected — yet always appreciated — and go directly to the staff working that day.”
“There’s no clear roadmap,” says 1310 Restaurant & Bar’s Jenn Crovato, a member of RE: Her, a national nonprofit group of women restaurateurs. “Nobody knows how to make this work, number one. And number two, everybody’s doing something different.”
Bowser’s budget proposal would fix the tipped minimum at $5.95 beginning Oct. 1. Approval by the District Council is both necessary and by no means certain. I-82 (and its predecessor, repealed by the Council in 2018) was advanced by the national organization One Fair Wage, which advocates on behalf of all tipped workers (delivery drivers, hairdressers, etc.), and opposed by Restaurant Association Metropolitan Washington, which drew on testimony from servers as well as from owners.
The day after the mayor’s announcement, Ward 1 Council member Brianne Nadeau joined a rally by union workers against the initiative’s repeal on the steps of the Wilson Building. Bussers and dishwashers, who generally make far less from tips than the front-of-house staff, are more likely to support I-82.
In contrast, Ward 2 Council member Brooke Pinto told The Georgetowner: “I have a responsibility as an elected official in our city to realistically evaluate the policy environment in the present day and pursue the best path forward for our city. Since the passage of Initiative 82, many workers have lost their jobs, consumers are regularly confused by higher prices and fees or priced out of dining experiences altogether, and our restaurants are struggling as a result of the changing landscape. I’ve attended hearings and met with countless stakeholders from workers to owners to associations to residents and have come to the view that the status quo cannot be maintained.”
“We are a hospitality-based economy,” declared Bowser, quoted in the Washington Post. With Congress blowing a billion-dollar hole in the District’s current budget and DOGE taking a chainsaw to the federal workforce, the mayor seems to be refocusing on private business, sports and tourism in particular.
“The economy that we’re dealing with right now and the environment for restaurants is vastly different than the economy and the environment that restaurants were operating in when this ballot measure was advanced,” she said.
Clearly, restaurants have been battered by a perfect storm: distanced and less-frequent dining out, a spike in working from home and rising food costs due to inflation, bird flu and tariffs. Is the fresh spate of announced closures in D.C. (by Lucky Buns, Brookland’s Finest and Tail Up Goat, among others) a warning sign or just going-out-of-business as usual? To what extent are these losses attributable to I-82, which some owners blame for staff reductions if not for shuttering altogether.
The most recent alarm sounded on May 6, when Immigration and Customs Enforcement agents showed up at more than a handful of D.C. restaurants, including Clyde’s in Georgetown — a close-to-home reminder of the impact the Trump administration’s high-profile deportation campaign is having on agriculture, food processing and, yes, the hospitality industry.
“To come in with guns, raid style, it’s so unnecessary,” commented Crovato, whose restaurant was not targeted on May 6. “You can conduct an audit.”
If California, the largest state in the USA, can have successful restaurants without the unethical tip-credit wage system, then maybe DC restauranteurs needs to learn how they do it. Hint: it’s really easy.
Servers and bartenders are “double-dipping” thanks to Initiative 82. Customers are still tipping 18% and above, so why increase their hourly rate? Servers never cared about their hourly rate, they loved their tips, but obviously they wouldn’t say no to a pay raise. Maybe okay for large Restaurant Groups or Corporations that can afford it, but not fair for small businesses. Pretty soon every restaurant will have to get rid of busboys, bar-backs & food-runners, and decrease the number of servers. Is that that we want?