Initiative 77 would require all Washington, D.C., restaurants to pay tipped employees (servers, sommeliers, bartenders) the standard minimum wage that every other business is legally obligated to pay. The District votes on the measure Tuesday.
Current D.C. law requires restaurants to pay $3.33 per hour to tipped employees — rising to $5 by 2020. If the tips an employee makes don’t add enough to constitute a minimum wage of $12.50 ($15 by 2020), then the restaurant is required to make up the difference. If 77 passes, wages for tipped employees will no longer be different from minimum wage for non-tipped employees — meaning that all restaurants will pay almost quadruple what they pay the majority of their workforce.
This initiative is being strongly pushed by Restaurant Opportunities Centers United, an advocacy group that claims the low minimum wage causes unfair pay, and that restaurants aren’t held accountable for making up tip gaps, among other things.
The great majority of restaurant owners and employees in DC are dead set against this initiative. Hiking the minimum wage so dramatically would force many restaurants to raise prices, eliminate staff, or close altogether. Restaurants already pay absurdly high rent for their space in D.C., and operating at a razor thin margin is typically the only option. Servers, sommeliers, and bartenders in D.C. make between $15-$40/hr with tips — sometimes higher depending on the volume of business. The high rate of pay and the low minimum wage are, in fact, what drive talented hospitality professionals to want to live and work in D.C. They know a D.C. restaurant has more flexibility with scheduling and hours, which gives people more time to spend getting to know their guests, and fine-tuning wine and cocktail lists.
Many tipped professionals migrate to D.C. from other cities like New York, LA, and San Francisco, where the minimum wage for all employees is high, because they become frustrated working in a restaurant where staffing has been slashed to save money, or tipping has been eliminated entirely.
I wrote about Union Square Hospitality Group eliminating tipping back in 2015, and then got an opportunity to work for them about a year later. In the original piece, I praised Danny Meyer for the initiative, and honestly thought it was going to be good for restaurants. The reality of working in the “No Tipping Kingdom” was quite different. The money was awful. Because the money was bad, the employees were miserable. The top tier of tipped employees that USHG had once been known for, had departed soon after the announcement of the “no tipping” policy. The restaurant I worked for never had enough staff. People would come interview, and when they found out about the pay scale, they would not want to stay. They have a system developed to help alleviate the low pay issue called “revenue share,” in which an employee can be a level one, two, or three, depending on how good they are, ranked by management. Each level has a different pay scale, albeit unnoticeably different on a pay check. Overtime was monitored rigorously, and overall morale was just terrible.
You can’t blame Meyer, he was only reacting to the situation he found himself in. He pays extraordinarily high rent for all of his restaurants, and in the face of a required $15 minimum wage for tipped employees, he had to do something drastic. His choice was to either lose his most talented staff, and never be able to replace them, or lose his business.
This is the fate for Washington D.C. dining if Initiative 77 passes. Quality restaurants will be forced to raise prices and ask their patrons not to tip in order to pay their staff. Right now D.C. is one of the most exciting, emerging restaurant markets in the country, but if 77 passes, its growth will be permanently stunted.