This week, DC City Councilmembers voted 7-5 to derail Initiative 82, a ballot measure passed in 2022 that was on its way to fully eliminating DC’s tip credit in 2027. This is a historic vote siding with local restaurants and local tipped workers who told Councilmembers the law was hurting their livelihoods and shuttering local eateries. The full budget with the amended tip credit law will now go for approval by Mayor Muriel Bowser – who has been supportive of Initiative 82 repeal – and then to President Donald Trump for Congressional approval.
The fight to protect and restore DC’s tip credit has been several years in the making. In just the first two years of implementation, Initiative 82 has already claimed thousands of lost tipped server and bartender positions, slashed millions in workers’ tips and overall earnings, and closed more restaurants annually every year since COVID.
On Monday, the majority of council members sided with these workers and operators and voted to try to mitigate the damage Initiative 82 would inevitably cause if allowed to move forward. The Council approved an amendment to Initiative 82 that would cap the tipped wage to equal up to 75% of the regular minimum wage – which increases every year based on inflation – by 2035. Currently, the District’s tipped wage stands at $10 per hour, roughly 56% of the regular minimum hourly rate of $17.95.
As Councilmember Charles Allen, one of the amendment’s co-sponsors, put it:
“Plenty of businesses, both longtime and newly opened, tell me the math just doesn’t work, and others say they’re simply not going to open up any more restaurants here…This [amendment] is a step that we can take that provides several years of stability.”
Here’s a visual summary of the District’s original tipped wage law, the changes under Initiative 82, and the new path forward outlined by the Council’s amendment.
The amendment steers the District away from a rapid full elimination of the tip credit, likely to continue and potentially worsen the devastating economic consequences DC restaurants and tipped workers have experienced the last two years. However, the amendment will still trigger annual tipped wage hikes every year. Especially with DC having one of the highest minimum wage rates in the country – allowing the tipped wage to rise to a larger share of this annually-increasing rate will continue to raise the stakes for local operators trying to stay in business and employ their staff.
While this action by the DC City Council does not fully repeal the harmful Initiative 82 policy, this historic vote is a resounding acknowledgment of worker and local operator testimony regarding the hardships Initiative 82 has brought to the local restaurant scene. It is also a historic win for workers and operators, and marks a path toward finding sustainable relief for restaurants to thrive and employ DC residents for years to come.