By Tatyana Hopkins
Voters in Washington, D.C., approved Initiative 77 in the city’s June 19 primary. The ballot measure will eliminate the subminimum wage for tipped workers in D.C. by 2026 through a gradual increase in the tipped minimum wage to match the standard minimum wage, which previously had been set to increase to $15 by 2020. Currently, tipped worked receive a base wage of $3.33.
Supporters of Initiative 77 believe the measure will give tipped workers a predictable income and protect them against discrimination from customers. Currently, tipped workers earn a majority of their wages from tips, but businesses are legally obligated to make up the difference if wages fall below the minimum wage, which is already set to raise to $15 by 2020 through a local measure passed in 2016.
Following the vote, Michael Selmi, a professor of employment law and discrimination at GW Law, discussed with GW Today how the measure could impact workers and businesses in the city.
Q: Now that the initiative has been approved by D.C. voters, what happens next?
A: The initiative eliminates what is known as the tipped minimum wage
where workers in D.C. who received tips were paid $3.33 an hour so long
as their tips amounted to the minimum wage, currently $12.50. Under
the law, all workers will eventually earn the full minimum wage,
although the law is phased in and will not be in full effect until
2026. The first increase of $1.50 is scheduled to go into effect July
1 but will have to wait for both congressional and D.C. Council review.
Q: If the changes called for in Initiative 77 are implemented, should
we expect a drastic shift in restaurant prices? Are there any
potential implications if the measure goes into effect?
A: Seven states including California and Washington have eliminated the
tipped minimum wage, and both San Francisco and Seattle have higher
minimum wages than the state required wage, yet studies generally show
vibrant restaurant scenes in those jurisdictions. Some restaurants
may seek to reduce their labor, and others may institute service
charges in lieu of tipping, and no doubt some restaurants will seek to
raise prices, but if experience in other states is an indicator, then
the changes should be less drastic than the opponents of the
initiative claimed.
Q: Currently, employers are legally obligated to make up any
difference in wages if tipped workers do not make minimum wage through tips, but does that happen in reality?
A: The issue of what is known as "wage theft" is widely underreported so
it is hard to know how often employers fail to make up the difference,
but several studies have indicated fairly widespread abuse, and it is
clear that this is an issue that is under enforced.
Q: Are there any groups in particular that stand to benefit if the measure goes into effect?
A: The most likely beneficiaries are those who work in lower-cost
restaurants and diners where check averages, and therefore tips, are
smaller. It is also likely that many, if not most, workers will
receive benefits at least with the initial increases.
Q: What would be the process for the D.C. Council or Congress to
overturn the measure? How likely would it be for any these legislative
bodies to void the measure?
A: As is true with all D.C. laws, there is a period for congressional
review, but there is little reason to think Congress will intervene.
However, the D.C. Council can repeal the law by majority vote (as is
true with all legislation), and before the vote 10 of the 13
council members and the mayor opposed the legislation (only GW Law
Professor Mary Cheh, who represents Ward 3 on the D.C. Council, supported Initiative 77). Efforts are already underway to repeal the legislation and one of the rallying cries is
that voter turnout was so low (17 percent) that the new law does not reflect the will of the people. But it is always an extraordinary act when a governing body overturns a citizen-supported initiative.
