WASHINGTON (AP) — A controversial proposal to change the pay structure for servers and other workers at Washington's bars and restaurants was approved Tuesday, four years after an identical measure was overturned by the D.C. Council.
Initiative 82 eliminates the so-called tipped wages system in which restaurant owners pay certain staff members well below the $16.10 minimum hourly wage on the assumption that the difference would be made up through customer tips.
Currently, restaurant managers pay some staffers salaries as low as $5.35 per hour. If the employees' tips for the night don't raise that income up to the minimum, the employers make up the difference.
That two-tiered system will now be phased out and employers will be required to pay every staffer at least the $16.10 minimum by 2027. With more than 40% of the expected vote in, the initiative had received more than 66,000 votes of approval compared with around 22,000 votes against.
An identical initiative was approved in 2018 by voters in 2018. But it was almost immediately reversed by the D.C. Council and Mayor Muriel Bowser in a rare move that drew accusations of backroom influence from the local restaurant association.
Several councilmembers who voted to overturn the previous initiative have publicly stated they would not do so again if the new measure succeeded.
The issue spawned fierce debates among the hospitality industry in 2018, and its revival did the same this year, with campaign placards for and against it alongside those for mayoral or council candidates.
Supporters claimed the change will offer protection and equal footing for all employees, while opponents — including the local restaurant association — warned that the extra expense will drive up costs, force smaller independent restaurants to close and lead to extra charges that would drive away customers and discourage high-end tipping.
The dynamic was more complex than merely labor vs. management; the debate divided the staffs of restaurants and bars. Many waiters and bartenders opposed it since they currently earn well above the minimum on tips and feared those tips would shrink if an extra service charge is imposed.
Geoff Tracy, a prominent local chef with two restaurants in D.C., opposed the measure, but he stopped short of predicting it will lead to layoffs or restaurant closures. Rather he described it as providing the illusion of change without actually accomplishing much.
Tracy said servers and bartenders in his restaurants make below $6 per hour, but after tips the servers average $36 per hour and the bartenders make more than $40. He predicted that adding another $10 per hour to their base pay would simply force a new service charge, drive down tipping and, in the end, everybody would be making about the same amount or less.
“I'm not really a big fan of raising prices on my customer base,” Tracy said. “Really the only beneficiary will be the District of Columbia, which is going to charge 6% taxes on all these new service charges.”
Ryan O’Leary, one of the leaders of the pro-Initiative 82 campaign and a former tipped server, said the initiative was meant to protect some of the most vulnerable members of the hospitality industry. O'Leary said the strongest internal opposition has come from “really well-established bartenders who are at the top of the pecking order.”
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