Arlington, VA – Today, the Employment Policies Institute (EPI) released a new study examining the impacts on DC restaurants of Initiative 82–a ballot measure that would phase out the tip credit for restaurant workers by 2027. 

The study shows that DC full-service restaurants have lost as many as 4,000 jobs since the implementation of I-82, and 70% of restaurants have cut hours, laid off staff, or stopped hiring altogether. The study follows a recent documentary that chronicled the stories of workers negatively impacted by 82.

Rebekah Paxton, EPI’s research director, made the following statement on the data:

“In just over a year and a half, the data is clear: Initiative 82 has cost employees their jobs and their tips, and is shutting down restaurants at a historic rate. If left as is, Initiative 82’s scheduled further wage hikes will continue to suffocate an industry gasping for air.”

The analysis shows: 

• D.C. full-service restaurants have lost as many as 4,000 jobs since implementation of Initiative 82. Seventy percent of restaurants have cut hours, laid off staff or stopped hiring.
• Survey data shows restaurants in the city are closing at a higher rate than any year since the pandemic.
• Employees report that they are worse off under Initiative 82, not better.
• A database compiled by DC residents shows the exponential rise of service charges in the District.
• Another survey shows that if these wage hikes continue as planned, restaurants will continue layoffs, raising prices, adding service charges, and close down or leave the city for neighboring Maryland and Virginia.
• This on-the-ground evidence concurs with a larger national picture: Tip credit elimination tried elsewhere across the country has cut jobs and tips and shuttered restaurants.
• Recently, progressive voters in Massachusetts—led by that state’s Democratic governor—rejected tip credit elimination by two-to-one. 

Background: 

• Initiative 82 was passed by voters on the ballot in November of 2022, with promises of “tips on top” and no consequences for workers.
• The first wage increase took place on May 1, 2023, with a second increase hitting just two months later on July 1, 2023, and a third hitting on July 1, 2024.
• After the ballot measure passed, many restaurants in the District began tacking on service fees to customers’ tabs to offset the spike in labor costs, frustrating both workers and patrons.