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The D.C. restaurant industry spent the summer grappling with a divisive ballot referendum that seeks to eliminate the tip credit in the District. On Sept. 17 and in the wee hours of Sept. 18, the pros and cons of Initiative 77 resurfaced at a marathon hearing on a bill introduced by Council Chairman Phil Mendelson that would repeal the ballot measure that passed by 56 percent in June’s primary election.
A tip credit establishes a two-tier wage system where employers can pay tipped workers a lower base minimum wage ($3.89) instead of the standard minimum wage ($13.25). Tips from customers make up the difference, and if tips fail to carry a worker’s earnings over the standard minimum wage, the employer is required to pay the remainder.
Initiative 77 aims to phase out the tipped minimum wage in eight increments until it reaches $15 in 2025. Starting in 2026 there would no longer be a tip credit. All workers would be paid the same minimum wage directly from their employer.
National labor group Restaurant Opportunities Center United (ROC) collected enough signatures to get Initiative 77 on the ballot. Supporters don’t think current enforcement laws go far enough to guarantee that employers pony up and pay when tips are not enough to get servers to the minimum wage, and say the current system primarily disadvantages women and people of color. On voting day, the District’s African American neighborhoods were most supportive of Initiative 77.
Opponents were relieved to see seven of 13 D.C. councilmembers introduce a bill in July repealing Initiative 77 outright. Those against Initiative 77 are fearful that when restaurant owners eventually have to pay tipped workers $15 an hour, the increased labor costs will lead to job cuts, lower take-home pay for workers, and stalled restaurant industry growth.
The discourse surrounding the initiative has been contentious and confusing as national groups on both sides, along with workers, activists, and business owners, engaged in a tug-of-war that played out in town-hall-meetings-turned-shouting-matches and nastiness on social media.
Expect the Council to take up a vote on the repeal bill in early October.
The last round of witnesses primarily brought more testimony from tipped workers and restaurant owners, who are accustomed to being functional at this hour. We also finally heard from a tipped worker who is a food runner, not a server or bartender. Witness 215 began testifying at around 2:15 a.m.
Out of 13 D.C. councilmembers, only Anita Bonds, Elissa Silverman, and Phil Mendelson are still here.
Jeremiah Lowery gives his testimony. He ran for D.C. Council At-Large in the primary. He is currently a political organizer doing contract work with nonprofits. “I met a lot of voters that voted for you Anita Bonds and Phil Mendelson that voted for 77,” he says. Bonds is on the record at debates, according to Lowery, saying that if 77 passes it will be implemented. “The ballot is a useful tool, I hope the Council will respect voters who came out to vote not only for them but the initiative too.”
Dave Roubie is the managing director of The Tabard Inn and talks about repercussions of 77 that have yet to be addressed, including the fact that labor costs are tied to other costs like payroll tax and, in some circumstances, rent.
James Roderick is a tipped worker at Dew Drop Inn and calls 77 a detriment to city as a whole. “ROC [Restaurant Opportunities Centers United] lead a smear campaign and treated us as ignorant children who don’t know any better,” he spits. “This initiative is a mistake. To come out and say we’re doing it wrong, and leave it up to people who don’t understand, who make false accusations and claims, makes me sick as a D.C. voter and a human being. If this goes through, no one will be here to say ‘I told you so’ because no one will be left. I am proud of the money I make. I made $65,000 last year. There’s always someone’s friend who works at Denny’s. If you work somewhere and you don’t make good money in D.C., you leave.”
Ayana Teran is a food runner at Rose’s Luxury. She’s one of the only members in this category of worker—restaurant support staff—to testify at the hearing. She says her wages are collected from a tip pool shared with bussers. ”My wages differ, but they’re always at least $15 an hour,” she says. “Last week we made it into a Michelin guide. These rating and awards system draw attention to us as a city. We’ve become a food city and that’s a big deal.” She says that if 77 is enacted, restaurants will close and talent will look elsewhere or change industries. “The tip credit allows small business owners to hire more people,” she continues. “ROC came here to push this agenda without knowing who we are and where we stand on this issue.”
Bill Thomas, owner of Jack Rose Dining Saloon, compares Initiative 77’s impact on the bar industry to Prohibition’s impact on the bar industry, and then provides an analysis of how 77 would impact his current and future businesses. He says he’d have to hire four to five fewer people per location if 77 stands, and says those people would likely make $20 an hour.
Paul Holder is a partner at Town Hall, Sixth Engine, and The Salt Line. He expresses frustration that not every person who spoke at the hearing is a true stakeholder. “Policy wonks who have testified are dead wrong,” he says. “There is no groundswell of tipped employees for 77. And Jane Fonda will not be waiting tables in D.C. anytime soon.” The actress was at the Wilson Building in July to support 77. While people can argue over what qualifies someone as a stakeholder, Holder is correct that the majority of those who spoke out against a repeal at the hearing were not tipped workers.
Erica Christian is a tipped worker in favor of the repeal. She refutes ROC’s statements about the local restaurant industry and race. “I am black. I am a woman. I’m queer. I’m a tipped employee. I’m pretty sure I’ve ticked all of ROC’s boxes when it comes to discrimination,” she says. “I used this industry to pay my way through college. I’ve only faced tremendous access to upward mobility. I now have access to health insurance and a 401k at a Michelin star restaurant. 77 does nothing to protect workers. All it does is raise a base wage. There’s nothing that can be done just through the initiative to protect wage theft, and there’s no industry in the world where you can end sexual harassment by raising a base wage. Initiative 77 has nothing to do with helping black people flourish in this industry. This industry has done nothing but uplift me.”
Bartender Faith Alice Sleeper calls 77 a “sloppy and misguided initiative” and says she’s “terrified for the future of my industry family.” Like others have expressed, she says: “Our support staff will lose their jobs first, many of whom are immigrants.” Later she accuses ROC of using tipped workers as pawns and says she was against putting this decision to the voters, many of whom do not work in restaurants.
Ris Lacoste, owner of RIS, is still awake. She opened her books to tell the Council exactly how much every position in her restaurant makes. She employs 64 people. “My line cooks make $14 to $19,” she says. “Prep cooks make $14 to $16. Dishwashers make $13.25 to $15. … Food runners make $15 to $20 with a $10 base rate. Daytime waiters make $20 to $30 and night time waiters make $30 to $40 an hour.”
Khaim Tucker, former tipped worker, says, “I’ve seen how servers lose profits when seasons change. People have to be able to survive and provide for their families and cannot do so on $3.89 an hour. By 2025, $15 will be much better than what’s in place. I believe in America, I believe in democracy, but first and foremost I believe in the people.”
Dionne Reeder, who is currently running against Silverman for an At-Large seat on the D.C. Council, owns Cheers at The Big Chair in Ward 8 and is against 77. She calls it polarizing and suggests it’s a distraction from focusing on workers’ rights on the whole. “I do not need 77 to do right by my employees,” she says. “We should focus on strengthening the laws that protect workers against discrimination in the workplace.”
Clementine Thomas, owner and operator of Chez Billy Sud, says abuse in the workplace is about power. “An employer who maintains a culture of fear and harassment will not suddenly amend their ways if we don’t count tips on top of an hourly wage,” she says in her testimony in support of a repeal. “The barriers to entry for first-time minority owners will increase,” if 77 is upheld. “I’m not asking you to blindly trust in the good intentions of a few owners. This debate has brought us to the table. We’re ready to put in the work to codify safe working environments and prioritize access for women and minority owners.” She closes by saying that her payroll costs would go up $250,000 if 77 stands.
Zakina Bramble Hakim is a server and has worked in restaurants for eight years. “This isn’t a fight against the industry, this is a fight for the people,” she opens. She supports Initiative 77. “Just because you might have a narrow experience and might be successful doesn’t mean it works for everyone,” Bramble Hakim continues. “Restaurants owners treat you with the same amount respect that they pay you. If they’re paying you $3.89, they treat you as cheap, expendable labor.”
Ntebo Mokuena is a climate and racial justice organizer who is a former tipped employee. She says she has had to endure sexual harassment and “wear more make-up,” presumably at work. She testifies that she believes the majority of servers and bartenders who testified today work in more upscale restaurants. “It’s important to recognize that we all don’t fully represent tipped workers who may be uncomfortable testifying here,” she says.
Aubrey DoBoer, a server and bartender, voted no on 77 but came to the hearing to defend it because after it passed she learned “many of the arguments behind 77 were false.” She says increasing the base wage would be a step in the right direction in addressing uncertain wages and situations of sexual harassment. “People yell insults about my intelligence or my body and I still need their money,” she says.
Clare Duncan, a tipped employee, calls restaurants a creative, fast-paced line of work that not everyone is capable of and notes that she has devoted time and money to training to improve and move up. She believes superior skills and work ethic bring higher wages. She notes that she has been “horrified by the rhetoric that’s been used to talk about sexual harassment tonight,” explaining that “the notion that I have to change something about the way I earn my living is abhorrent. It is not up to me to change a systemic, disgusting habit that the male population has developed.”
After several other testifiers, Mendelson chimed in and said, “I want to get into a conversation about sexual harassment but it’s hard as a male. It just seems to me that to say the tip is the reason for sexual harassment is blaming the victim.” Silverman brought up a New York Times article that discussed how much tipped workers are willing to deal with in exchange for tips and said that she wants to take steps to improve restaurant work culture, like adding an anonymous tip line. “I would not be here until 2:15 a.m. listening to you if I wasn’t dead serious about your industry,” she said.
The last witness, a tipped worker and hospitality industry consultant who supports a repeal of 77, began his testimony at 3:15 a.m.
At 11:45 p.m. the hearing is at witness 159 of 243. Silverman, Mendelson, and Bonds are still present.
Things started to get more lively at the 10:30 p.m. mark. ROC member Venorica Tuckerwent hard at Mendelson. “What I think sir is you should have been fair and I don’t think you were,” she says. “You and Mr. Evans and a few others have decided that this is going to be a repeal. When people come and give their opinion and their views you should listen and listen with an open mind and not have an opinion already. Your mind’s made up.” When Mendelson responded, the still robust crowd shouted at him for “talking down to her.”
Monica Weeks is the president of DC NOW (National Organization for Women) which has 800 members in D.C. She said that she faced sexual harassment in restaurants and urged the council to uphold the vote.
Later on, Amanda Choutka also addressed sexual harassment. She is a tipped worker at Moreland’s Tavern. She testified “as a sexual assault survivor and someone who encountered sexual harassment at several restaurant jobs.” Choutka calls it a “logical fallacy” that 77 would lessen or eliminate sexual harassment in the industry. “Sexual harassment and sexual assault happens in a lot of industries,” she said. She made the point that coming forward is complicated, but if a victim wants to exit the situation, the restaurant industry offers flexibility in terms of changing jobs.
Allison Kays is the general manager at Justin’s Cafe. She describes her restaurant as a local neighborhood bar that aims to source products from local suppliers. She says that if 77 passes, there will be a drastic increase in payroll ($107,000 per year) and also thinks she would have to “move to big box national suppliers and cut staff.”
Julia Reticker-Flynn is the Youth Activist Network Manager at Advocates for Youth. She says she’s testifying “as a person committed to racial, economic, and reproductive justice” and details three reasons for why she voted for 77 in June: reducing economic insecurity for female tipped workers; making tipped workers safer by reducing the level of sexual harassment and assault; and because she doesn’t feel like it threatens the restaurant industry. “I’ve dined out in California and Nevada and still tip 20 percent,” she says. “D.C. has the opportunity to be a leader on the East Coast in championing efforts that reduce poverty and sexual harassment.”
Taun Sterling is a new Ward 5 resident who just moved here from Portland, Oregon where he worked in restaurants as a waiter, dishwasher, and bike courier. “Oregon doesn’t have a sub-minimum wage yet remains a vibrant, bustling food scene,” he says. “I wasn’t at the mercy of tips. I was lucky enough to make this industry work for me.” He wants 77 to stand because he feels it “dissolves racial and gender inequalities in the restaurant industry.”
Brian Barrera is a tipped bartender and also a salaried manager. He calls it an outright lie that ROC has made tipped workers sound like beleaguered class of workers and says the tip credit allows small business to stay viable.
Out-of-towner Joel Panozzo owns and operates The Lunch Room in Ann Arbor, Michigan. He is against a repeal. “As a business owner I think it’s important to pay all employees a living wage,” he says. “The two-tier wage system encourages an unsafe work environment.” He adds that at age 15, he experienced sexual harassment in his first tipped job. “I know what it’s like.”
National Research Director for ROC, Dr. Teofilo Reyes, is also a visiting scholar at the Food Labor Research Center at UC-Berkeley. Instead of stating ROC study findings, he sites National Restaurant Association data he feels prove the same point about wages in states with a tipped minimum wage vs. those without one. He also says the council should look to what happened with the smoking ban an example.
Rev. Graylan Scott Hagler is the senior minister at the Plymouth Congregational United Church of Christ. He’s incensed that the council is considering an outright appeal. “We are a colony and we have extremists that sit on Capitol Hill and attempt to ram things down our throats every week and every month,” he says. “Now we’re doing the same thing. That’s a crying shame. We need to be about protecting the vote of the citizens of the District of Columbia to pass 77. The only ward that defeated 77 by a slim margin was Ward 3. The whitest and richest ward dictates what the rest of the city lives by? That is a racist proposition. It’s cracker politics. We need to have a discussion and a compromise. Even if you modify it you’re still protecting the vote.”
Someone shouted, “When do we get to vote on your salary?”
Mendelson said no outbursts from the chamber.
Anthony Lorenzo Green from Deanwood says it’s no mistake that support for 77 came from black and brown communities in D.C. He is not a tipped worker. “Initiative 77 won’t just increase wages for swanky establishments west of the Anacostia River, it will also increase wages at the few restaurants we do have in Ward 7, like the Denny’s,” he says. “A repeal is a spit in the face of black and brown people. I don’t see a proposal on the table to replace 77. We have to answer the call of our people and use that vote to send a message.” Ignoring Mendelson’s gavel because his time is up, Green continues, “You come East of the River and you shame us about not participating but when we do participate you repeal it.”
Gracie Anderson owns Town Tavern in Adams Morgan. She says that if 77 stands, tipped workers will make less as operators will be forced to change their business models. This could include a service fee or counter service. She also says that D.C. will lose taxpayers as owners move their businesses to Maryland and Virginia where there’s still a tip credit. Finally, she says, “The tipping system is empowering for servers and bartenders. We can find another way to combat the concerting issues that were brought up today, but 77 is not the answer. It only creates more issues that D.C. will not be able to recover from. Let us work together with the workers, the owners, to find a better solution.”
The latest slate of witnesses featured passionate D.C. residents as well as individuals who do not work in the restaurant industry but come at the 77 discussion from the perspective of working with or for low-wage workers. The number of tipped wage workers and restaurant owners testifying in favor of the repeal has dwindled in part because they left before it was time for them to testify and in part because of how the numbered list of witnesses was organized. We are on witness 126.
Ward 1 resident and former tipped worker Griffin Janner says when he was hired as a bartender he earned $7 plus tips. Then his employer lowered the base wage to $3 an hour. “This dramatically lowered my expected earnings and about half of the staff quit,” he says. “The company was not wrong for doing this, it was their legal right. But workers shouldn’t be subjected to such variation in the wages. I believe there’s a way to implement 77 so that restaurants can continue to see higher revenues and tipped workers can take home more earnings.”
Diana Ramirez is the director of ROC-DC. She emphasized that “the majority of tipped workers are non-white” and “the largest support of it came from black wards 5, 7, and 8.” She closes with, “You have the opportunity to lead the nation in protecting some of the most vulnerable workers. We’re open to compromises that remain true to the initiative.”
Mendelson and Bonds have no questions for Ramirez.
Katharine Lanfield is a social worker who says she has seen how our inequitable economic system makes life difficult for low-income workers and calls the move to repeal 77 an attack on the democratic process as well as low-wage workers. She asks, “Is there any other industry in which the customers, rather than the employers, are responsible for paying a worker’s wages?” “Tipped workers are not earning a fair wage from their employers and it’s fully in our power to right their wrong,” she adds.
Anita Bonds, the only councilmember in the room, asked Lanfield for more information.
“When I hear restaurant owners and managers talk about how a change like this is unsustainable, all I can think is how unsustainable it is to live on poverty-level wages,” she says. “It’s the only industry I can think of where workers are paid for by the customers. That gives me pause and makes me question the whole situation that we have in D.C., where income and wealth gaps are widening. I understand that it’s really difficult and challenging for a business, but that doesn’t mean that it’s right or that it’s a business model that I’m comfortable with.”
It’s an honest question. Would anyone paid on commission, like retail salespeople or realtors, fall into the category of an employee that earns part of their wages or salary directly from customers?
Mendelson has returned to the chamber.
Renee Bracey Shermanis the senior public affairs manager at the National Network of Abortion Funds. She explains why her support of 77 and her work are linked. “Economic justice and thriving wages go hand in hand with reproductive justice and healthcare access,” she says. “For women in D.C., a fair wage can mean the difference between affording healthcare or going without.” She says she got a taste of working for commission in the retail industry and didn’t like the unpredictable wages.
Lisa Hunter, who challenged Charles Allen in this year’s Ward 6 Democratic primary, is fired up. Shesays it would be “wildly inappropriate” to thank councilmembers tonight because this hearing shouldn’t be happening. “We’re having this hearing because the D.C. Council has been tricked or bought by the Save Our Tips astroturf campaign featured on John Oliver’s show.”
Daniel Katz is senior counsel for Washington Lawyers’ Committee for Civil Rights and Urban Affairs, which has a worker’s rights clinic to help low-wage workers facing discrimination, illegal termination, wage theft, and other issues. He says he’s litigated wage theft cases for 25 years. “We see dozens of wage theft cases a month” he says. “The key to enforcement is having strong statutes that can be enforced equitably.”
Jeff Vogt of the Solidarity Center feels similarly. He says that while employers are required to make up the difference between the tipped minimum wage and standard minimum wage, countless reports show some employers fail to make up the gap. “Wage protections are insufficient and because of the tip structure, some women are exposed to sexual harassment from customers,” he says. “Setting a fair wage paid by the employer can reduce these problems.”
Jack Evans has rejoined the hearing.
David Cooper is the senior analyst at Economic Policy Institute that compared Seattle and San Francisco to D.C. in his report that was brought up earlier. He says that take-home pay for the typical tipped worker is higher in San Francisco and Seattle than it is in D.C. “The median hourly wage in San Fran is 21 percent higher than those workers in D.C.,” he says. “In Seattle, it’s 7 percent higher.”
Mendelson is at a loss after hearing some of the testimony from 77 supporters who do not work in restaurants. “Workers are saying they don’t want this,” he says. “Worker after worker is saying we don’t want this … There’s something out of whack here when what I’m hearing from non-workers who say this is good for workers while workers are lining up and saying no it’s not.”
Katz responds, suggesting having a single wage will make enforcement easier. “When you have a group of workers who are subject to a sub-minimum wage all sorts of factors come into play with enforcement,” he says. “I speak to workers every week who are tipped workers who do not make the D.C. minimum wage because employers don’t make the difference.”
Jack Evans reacts to Cooper’s research by saying he sees no correlation between San Francisco and Seattle. He adds that he dines out frequently and has been asking tipped workers of all kinds how they feel about 77 and says he encounters only “enormous” opposition to it. “This is really a problematic situation for the District of Columbia. If this happens the city will adapt. We’ll have less restaurants. Less employees. We adapt to everything. But at what cost do we adapt? Who gets hurt. Someone will get hurt in this situation.”
Elissa Silverman is back to talk about data and research with Cooper because during RAMW’s testimony, Silverman says “someone said findings should be ignored because Cooper used American Community Survey data.” Cooper says that the reason he couldn’t use the “gold standard” for wage data (Bureau of Labor Statistics Current Population Survey) is because it’s not applicable on a city level.
Ed Lazere, the executive director of the DC Fiscal Policy Institute, says the best real world examples are the seven states that do not have a tip credit, where he says tipping rates are higher. “Moving to one fair wage will result in higher menu prices, but not dramatically so,” he says, citing the example that the “Grand Slam” breakfast at Denny’s is only $2 more in San Francisco compared to D.C. Lazere ran against Mendelson in the D.C. Council Chair race.
Samuel Shanks is a D.C. resident who voted against Initiative 77 because his friends in the industry told him to. But he’s had a change of heart. “As a city that’s oppressed by congress when it comes to self-governance, I find it hypocritical and disgusting that you’re considering overturning the will of the voters.”
D.C. Shadow Senator Michael D. Brown testified, agreeing with Shanks, calling the Council hypocritical. “I voted against 77 and stood in front of polling places with a Vote No 77 button on. Like many others I’m disappointed in outcome but there’s a sacred principle at stake and it must be honored. The issue isn’t whether this is the right choice or the wrong choice, it’s the voters choice. As Lincoln said, ‘We must now sit on our blisters.’”
We’re down to Bonds and Mendelson! We’re at 96 of 253 on the witness list. No shows are becoming more common.
Two witnesses testified from outside the restaurant industry: Dr. Yvonne Slosarski who published this op-ed in The Washington Post identifying her as organizer on economic-justice issues, and Eric Atilano, a civil rights lawyer.
“We don’t know how 77 will affect the hospitality industry,” Slosarski says. “However 77, like all minimum wage increases, can make the city a more equitable place to work, to live, and to eat.” She says predictions of closures and cuts are based on anecdotal evidence and limited studies and wonders if D.C. has too many restaurants in general or at least too many restaurants with bad operators.
“In 2017, restaurant owners said The Wharf would exacerbate the staffing crisis,” she says. The new $2 billion development largely has high-end restaurants like Del Mar, Requin, Kaliwa, Kith and Kin, La Vie, and Mi Vida. According to Slosarski, more people should be asking, “Are these restaurants accelerating our displacement problems?”
She also mentions that some of the tipped workers she spoke with did not know that they were entitled to minimum wage. “Almost everyone except for two people who are very well informed did not know that they had the option of filing a complaint saying they were victims of wage theft.”
Mendelson responds by asking, “If an employer is going to cheat the employee, they’ll stop cheating the employee?” Slosarski says, “They’ll cheat their employee out of less. They’re either giving their employees $3.89 and cheating them out of the rest or they’re giving them $15 and cheating them out of the rest.”
Jason Berry owns one of those restaurants at The Wharf, Mi Vida. “If I’m forced to pay my staff the full minimum wage with no tip credit my 5 to 7 percent profit margin will be closer to break even,” he says. He adds that he is likely to terminate two leases for future projects (another at The Wharf and another near the ballpark) if 77 stands. “Building D.C. restaurants will no longer be an attractive investment,” he says. “The 300 jobs that would be created are in jeopardy. 77 is punishing operators like me who follow the letter of the law.”
Atilano focuses his remarks on women and sexual harassment. “When victims speak, we must listen,” he says. “The Department of Labor and Equal Employment Opportunity Commission studies show that sexual harassment and retaliation in the restaurant industry is rampant because of the power dynamic created by the tipped wage system … Repealing a law that impacts women and gets people of color out of poverty that has worked in other states is wrong.”
Mendelson responds by questioning how 77 will alleviate sexual harassment in restaurants if the ballot measure doesn’t outlaw tipping outright.
A few more business owners also testified, including Jackie Greenbaum.
Greenbaum has 100 employees at the three restaurants she co-owns: El Chucho, Little Coco’s, and Bar Charley. She estimates that she will have to lay off 30 percent of her staff if 77 stands. “No one pushing this agenda has done the math and they don’t care that it doesn’t add up. The starry-eyed idea that we can just raise prices or add service charges is a fantasy.”
Ben’s Chili Bowl owner Kamal Ali is a no-show.
Raymond Blanks testifies with enough passion to wake everyone up. He’s a retired educator and Ward 7 resident, according to this Post story. “I don’t care about 77, I care about justice,” he says, explaining that earlier in his life he fought for voter rights in the South. “The electoral process in our country has become extremely fragile since Florida 2000. We no longer trust. The fact of the matter is that among African Americans and Latinos, who are frequently the victims of gerrymandering and suppression and new requirements of identification, the appeal would disenfranchise voters who favored the initiative. It would nullify fundamental democratic principles of one person, one vote.”
Councilmember Bonds says, “I don’t want to start a fight with Mr. Blanks, but when we talk about democracy and the rights of the persons who make democracy, the citizens of this great community, when do we begin to look at policy and how policy affects everyone?” Later, she asks if the council should have taken a closer look at the ballot initiative before it was put to a vote.
Blanks retorts, “I can’t believe the genius of this council wasn’t smart enough to come up with a different package. It’s essential to respect the right of voters. Recension is not an option.”
Kesh Ladduwahetty is the chair of DC for Democracy, whose 600 members support One Fair Wage. She’s employed as a graphic artist and designer. “We stand with the waitstaff of Denny’s who have to work much harder to earn minimum wage compared to a fine dining restaurant,” she says. (There is one Denny’s in D.C.) “We speak on behalf of the black restaurant workers who make $4 an hour less because of bias. These are the people the status quo exploits. We should judge the status quo not by the small minority it benefits.”
Mendelson asks Ladduwahetty about some of the stats she cited because the Economic Policy Institute data has higher numbers for median wages than she reported in her testimony.
All kinds of numbers are flying around when it comes to how many tipped workers live and work in D.C. and what they earn on average per hour. This is frustrating the councilmembers who remain.
We’re on witness 68 of 253 and the only councilmembers currently at the hearing are Silverman, Bonds, and Mendelson. The trade association and national association witnesses were grouped together, followed by a few restaurant owners.
Restaurant Workers of America flew in Joshua Chaisson, the national organization’s Maine-based co-founder and vice president, to testify. His remarks focus on discrediting ROC and stressing that “ROC’s end-goal is to end tipping entirely.” Maine voters, Like D.C.’s, passed a referendum that eliminated the tip credit. Chaisson successfully fought to get the referendum repealed. “I hope D.C. will follow Maine’s lead by listening to we, the workers.” RWA Board Member Simone Barron, who is based in Seattle, also testified.
As she has since Initiative 77 surfaced, Restaurant Association of Metropolitan Washington CEO Kathy Hollinger focused on how comparing D.C. to other markets is flawed because those other markets either never had a tip credit or eliminated the tip credit system a long time ago. RAMW contributed at least $55,000 to the Save Our Tips campaign, which fought Initiative 77.
“These markets are not parallel,” she says. “We talked to our counterparts in San Francisco and Seattle … The consistency is the feedback around job loss and how they’re restructuring in terms of business models. In Washington state, the feedback we received, most restaurants no longer have bussers. They’re rethinking who they are retaining on their staff because they’re employing three fewer people on average.”
Councilmember Silverman and Chairman Mendelson are probing witnesses about the recent Economic Policy Institute study that came out Sept. 12 based on Census Bureau and Bureau Labor Statistics data. “We are using data that I can tell you from my time at a think tank is the gold standard. Why doesn’t RAMW consider this the gold standard?” The author of the report, David Cooper, is signed up to testify. Silverman says she’s interested in having those who question the data join Cooper to discuss his findings.
David Moran is the chairman of RAMW and area director of operations for Clyde’s Restaurant Group, which he says employs 1,200 workers. He points out that his top tipped employees earn more than $40 per hour. “At Clyde’s we average 12,000 hours per week of tipped employees, so changes to tip credit have a dramatic impact,” he says. If 77 stands, he says, it would increase his labor costs by more than $7 million a year, causing him to lay off staff, reduce training, and eliminate contributions to schools and fundraisers. “This is a solution in search of a problem,” he says. The line that “77 is solution in search of a problem” is a slogan commonly used by 77 opponents that’s being repeated today. Clyde’s Restaurant Group was one of the biggest restaurant group donors to the Save Our Tips campaign (at least $16,000).
Rose Previte owns Compass Rose and Maydan, both off 14th Street NW. “I’m required to pay my workers minimum wage anyway,” she says. “I’m here because my staff asked me to fight for them and for there not to be a cap on their earnings … In this tale of a problem that never was, mercenaries and interlopers from other cities manipulated our system for their gain. You councilmembers are all we have protecting us from people like this—people who don’t care about D.C. We’re not New York. We’re not Los Angeles. And we’re not Seattle.”
Jill Marie Tyler co-owns Tail Up Goat and just announced she’s opening a bar across the street from her restaurant in Adams Morgan. She says no industry can survive a 300 percent increase in costs. “Storefronts will sit vacant, dining itself will fundamentally change as service declines when restaurants have to lay off staff. It does more to further a special interest group’s agenda than the D.C. restaurant industry,” she says. She closes, emotionally, saying that 77 isn’t the piece of legislation that addresses wage theft and sexual harassment.
Councilmember Bonds says that she thinks voters believed that all restaurant workers would be on equal footing if 77 passed. She asks restaurant owner witnesses to explain their employment structure. They explain that not all tipped workers earn the lowest possible base wage of $3.89. Moran says that some bussers will receive a base of $5 or $6 if they’re working shifts that are a little slower to “ensure their wages are competitive.”
Then Bonds asks if restaurant owners “play favorites” and pay some workers more than others. Previte reiterates that all workers are already entitled to the standard minimum wage by law, but adds: “I don’t think everyone in the restaurant deserves the same wage if they have different skills and abilities.”
As expected, some witnesses are no shows by this point in the day, as most bar and restaurant workers start their shifts around 4 p.m. The latest slate of witnesses include several ROC members.
Gregory Cendana is a Ward 8 resident who is against the repeal. He organized a “dine-in” at Florida Avenue Grill in support of Initiative 77 this summer. He is the co-chair of the DC Asian American and Pacific Islander Democratic Caucus and president of Can’t Stop! Won’t Stop! Consulting. He talks about how non-tipped workers and tipped workers all deserve a living wage. Washingtonians should care as much about the people working in restaurants as they do about the vegetables and animals they eat, he argues. “A tip shouldn’t be a substitute or subsidy,” he says. Then he went on to talk about “tipping being rooted in the U.S. history of slavery.”
Maria Bastasch, who works at Maydan and Compass Rose, implores the Council to focus on enforcement. “I’m here speaking against 77 because thus far the system has been beneficial,” she says. “I know there are individuals who are not making enough money and that’s where our focus needs to be. There’s no guarantee that if 77 passes, enforcement will improve … We should raise the minimum wage and focus on enforcement that is so severely lacking in D.C.”
Jason Hillegass is a part-time server at The Bird and works two management shifts a week. He says the average server at his restaurant makes $25 an hour including the $3.89 base wage. Bussers make around $18 an hour. “We track it,” he says. “That’s what we’re missing here … a lot of tracking.” He predicts that he would take a $15-an-hour pay cut if 77 remains in place. “I urge you to repeal it and learn more about the restaurant business model and see how it works and standardize that reporting practice across all restaurants instead of having what seems to an outsider as the Wild West.”
Trupti Patel, a bartender who has spoken at most 77 events where ROC has had a presence, gave the most fiery testimony against the repeal thus far, saying, “The very people who perform an action to make your life easier might not have eaten that day or might be sleeping on the street.” She discussed how some tipped workers earn poverty wages and pointed out that she’s only being assigned one shift per week at her restaurant “for coming out and taking a stand against 77.”
Pearl Rose Hood says she has worked as a tipped worker for nine years at everywhere from sports bars to James Beard-nominated establishments. She claims she experienced wage theft at Woodberry Kitchen in Baltimore. (That restaurant is owned by Spike Gjerde, who also owns A Rake’s Progress in D.C.) She also says her most recent employer pressured her into speaking out against 77 by including information in checks and in emails to staff. “I believe there is misinformation. Tipped workers are scared for their livelihoods and aren’t speaking out. I believe that 77 might lower the ceiling but it raises the floor.”
Thea Bryan, a ROC member who spoke at City Paper’s panel on 77, says she’s been bartending on and off for many years and feels a $3.89 base wage isn’t a fair wage, especially when business is slow due to the time of year or the weather. She says that in the time period where 77 has been debated, she’s received endless harassment. “There’s been [a] concerted effort to find out where I work so they can come in and dine and not tip me,” she says. “The misinformation on this has been ubiquitous and unyielding. Fear-mongering about the loss of livelihood has encouraged people to engage in vitriolic rhetoric.”
Councilmember Kenyan McDuffie thinks there’s a middle ground we can achieve but says it begins with overturning “what I believe is a bad law.” He says, “People who live in my ward that work in the industry do not support this. When I go inside the restaurants in Ward 5, I see people that look like the folks in my community. Restaurants bring people to this city to eat and dine and enjoy themselves. There have only been a few people today who we’ve heard from that support 77, but more people agree there are issues that need to be addressed.”
Councilmembers are starting to trickle in and out. Elissa Silverman is very engaged, asking questions after each round of testimony. Charles Allen and Kenyan McDuffie are also following closely and asking questions.
A community organizer with Restaurant Opportunities Center United (ROC) kicks off the next round of testimony. Sophie Miyoshi asks the council to remember “that D.C. has voted for progressive policy that will lift the floor for low-wage workers.” She believes restaurant jobs can’t be professionalized if base wages are as low as $3 to $5 an hour. “Restaurant work is a profession. We should be treated as professionals,” she says. Miyoshi also talks about tipped workers being at the whim of not only patrons but management too because managers can schedule employees for less desirable shifts.
Hearing from witnesses who are testifying against the repeal, Mendelson says, “Nobody has come up to me to say ‘I support this.’ I haven’t heard it from anybody. Nobody who works in a restaurant has said they support this, except someone connected to ROC.” Meanwhile, Silverman and other councilmembers continue to state that they’re concerned they’re not hearing from more vulnerable tipped employees, like support staff, who are more hesitant to come forward to talk about labor issues.
Server and bartenderLaura Pacholkiwsays the tipping system has given her “tremendous financial independence.” She works at a small neighborhood bar that she feels would not be able to sustain the significant labor cost increases if 77 stands. “Allowing me to work on a tip credit system frees up costs to coworkers who are not tipped employees,” she says, echoing other tipped workers who talk about back-of-house workers. “They can get paid higher than minimum wage and that’s great because these people are the backbone of our industry and deserve to be well compensated.”
Allen gets pragmatic four hours into the hearing. “There are seven people who have signed onto a repeal,” he says. “It’s highly likely that this is going to be repealed just by doing the math.” At the same time, he says he’s hearing that wage theft is a real problem. “Let’s not kick the can down the road,” he urges, suggesting now might be the time to see if anything can be added to the repeal bill that puts better protections for workers in place.
Several other tipped workers speak out in favor of the appeal, including Valerie Graham. She testifies that she has tended bar for 20 years everywhere from a dive bar to a fine dining restaurant. “We choose these jobs because we make far more than the standard minimum wage,” she says. “The fact that there are people in our industry struggling to survive deserves to be addressed in a thoughtful way. Initiative 77 isn’t it. ROC uses an axe where a scalpel would be more effective.
Mendelson asks a panel of tipped worker testifiers whether they encountered intimidation from their employer or whether they know anyone who has. Brett Johnson, a bartender at Larry’s Lounge and Dupont Italian Kitchen, responds: “I have not encountered any intimidation. At the two places I work, one of them never brought it up. The other said, ‘Whatever your views are, don’t argue with customers.’ I will not say that there aren’t people who aren’t experiencing intimidation. In my circles of working in this city for 20 years, I haven’t encountered the silent victims that ROC claims to represent. I can’t say they don’t exist but I haven’t met anyone.”
In response, Silverman chimes in by reading an email from a tipped worker who says they were asked by their owner to reach out to the council to say they’re against 77 even if they were in favor of it. She continues, “There are pay disparities along racial lines even in the restaurant industry. We have an opportunity today to engage in discussion of how can we close those gaps. Just because seven people signed on to an introduced bill doesn’t mean there’s seven votes and this is done with. If that were the case, why would be wasting all of your time?”
The second and third group of witnesses all support the repeal of this bill.
Mark Lee opens his testimony by describing a doomsday scenario, saying that if the council fails to repeal 77 “jobs will be eliminated, consumer prices will skyrocket, the District’s economy will be harmed, and local establishments will close.” Then he throws daggers at supporters of 77, calling their research faulty and based on “small data sets.” Lee is a Washington Blade columnist who was paid by the NO2DC77 campaign to fight 77 as a managing consultant.
Rose’s Luxury bartender Chelsea Silber has experience working in California where there is One Fair Wage. Her concern is for cooks and dishwashers. These so-called “back-of-house employees” are not tipped workers. “Increasing the base wage for tipped workers who already make well above minimum wage threatens those who do not make tips,” she says.
Two witnesses in the third group focus on how tipped employees are salespeople who work on commission. Billy Martin, the owner of Billy Martin’s Tavern in Georgetown, says he was a tipped worker for 18 years. His restaurant contributed at least $1,750 to campaigns fighting 77. “You must work hard to be the best,” he says. “Tipped employees must be top-level salesmen, not order takers. That’s what 77 would do if it becomes law, promote order takers.” He closes by calling 77 the “proverbial straw to break the camel’s back,” saying it would “diminish the the level of service that restaurants in the nation’s capital is known for.” Avalon Barnes, who works at Mate Lounge, also in Georgetown, says she was “taught that service is sales and tips are commission.” She asks: “If everyone gets a flat fee, what’s the motivation to go above and beyond?”
McDuffie asks about racial disparity in the D.C. restaurant industry. Karim Soumah, an African American server at RIS who supports the repeal of 77, responds: “I feel as if racism is real, it’s visual to us now in society for a lot of reasons, but I am not disillusioned that there aren’t opportunities I’m still not privy to today. But in my experience, working with small business owners, these experiences [of racism] are shrinking in this city. I’m proud of the diversity in D.C.”
Only four witnesses have testified as of 1 p.m. Hearings are typically “front-loaded,” as the largest number of councilmembers are in attendance at the beginning and take advantage of their opportunities to ask questions. Three of the individuals who testified were in favor of the repeal, one was not. Councilmember Anita Bonds has joined the hearing.
John Guggenmos is the first to testify. He founded the NO2DC77 campaign that raised at least $40,000 to fight Initiative 77. After describing his growth track through the local hospitality industry (he owns the bars Tradeand Number Nine), he opens by rejecting the idea that restaurant owners forced their tipped workers to take a stand against 77 and says that studies cited by the other side may not add up. “Math is still math,” he says.
The Director of DC Working Families, Matt Hanson, testifies that legislators should respect the decision voters made at the ballot box, adding that voters took this very seriously. He then compares prices of dishes in D.C. versus San Francisco, which does not have a tip credit. “AtRuth’s Chris Steakhouse in D.C. the live lobster is $29 and in San Francisco it’s $30,” he says. “I think customers would be willing to pay a little more for workers to receive good wages.” Hanson emphasizes that 77 does not abolish tipping.
Guggenmos responds to Hanson by saying, “Ruth’s Chris is a chain. They’re designed to absorb [costs]. There are restaurants that have gone out of business, yet chain restaurants are coming in and flourishing. When you look at growth, what kind of growth is it?”
Councilmember Jack Evans asks how Initiative 77 will work if Maryland and Virginia have a tip credit. Bartender Valerie Torres responds that 96 percent of D.C. restaurants are independently operated and says it’s not fair to compare D.C. to other markets.
Allen wants to know how large restaurant groups that have technology and systems in place to make sure support staff like bussers get tipped out the right amount still have problems. “I’m assuming a group like Farmers Restaurant Group has an electronic POS system, but they just settled a major wage theft case,” he says. Bartender Ryan Aston, who is also on the board of Restaurant Workers of America, responds that Initiative 77 doesn’t solve wage theft, adding that he’d like to see firmer penalties in place for wage theft violations, including fines and losing their liquor licenses. Back to Allen, who hints at a compromise being a possible best outcome.
Part of the early discussion focuses on whether or not Initiative 77 will impact tipped workers outside of the restaurant industry. Allen raised the question and Bonds chimed in, saying “the public is extraordinarily confused.” So far the only tipped workers testifying have come from the restaurant industry. City Paper will closely monitor whether there are bellhops, valets, hair stylists, and other workers who accept tips here to make statements.
Councilmember Mary Cheh asks the first slate of tipped worker testifiers if they’re amenable to a compromise. Torres says, “We already have had conversations about the multiple things we can do to address issues that have come to light, but the initiative isn’t one of them, and no compromise is going to make it better.” Guggenmos says he’d be willing to sit on a committee to talk through a compromise, but says that ultimately “it just extends a bad law.”
Present at the start of the hearing: Council Chairman Phil Mendelson and Councilmembers David Grosso, Mary Cheh , Elissa Silverman, Brandon Todd, Trayon White, Jack Evans, Vince Gray, Kenyan McDuffie, Charles Allen, and Brianne Nadeau.
Mendelson’s opening statement emphasizes that the ballot language of Initiative 77 was “misleading at best, dishonest at worst” because it included provisions that were already law. He also says that if 77 stands, tipped workers will see a reduction in their earnings. He brought up the #MeToo movement arguing that abusive men will exert their so called power in any situation they can, saying “sexual harassment is despicable and must not be tolerated.” He doesn’t believe 77 goes far enough in addressing sexual harassment in the workplace. “This initiative is a false promise, it won’t protect workers from sexual harassment.” Finally, he added that if individuals want to submit written testimony they can do so until Oct. 1 at 5 p.m.
Ward 3 Councilmember Cheh gives the strongest opening argument against repealing 77. She supported the ballot measure from the get-go “as a matter of fairness for low wage workers, two thirds of whom are women and single parents.” The ward she represents, however, voted opposite her, largely opposing Initiative 77.
In the hearing, Cheh points to seven states that already have one wage paid directly to workers from employers. “Data from restaurant associations in those jurisdictions that have one wage except for one are expected to exceed the District’s projected restaurant growth,” she says in her opening statement. She also doesn’t believe workers will be tipped less if 77 stands. Cheh intends to offer a compromise amendment that would “allow a win-win situation” where the tipped minimum wage would go up 66 cents an hour per year until it reaches one wage. “I believe lengthening the phase in time will allow us to see if there are adverse effects and intervene if necessary. We have a way that respects the will of the voter and achieves the benefit of raising the wages for low-wage employees.”
Silverman has one big question for the hearing today. How much do bussers, food runners, and barbacks make? These support staff at restaurants are “tipped out” by servers and bartenders. “I was told by one restaurateur who owns seven restaurants that bussers get tipped out between 5 and 10 percent. How does the busser not know it’s not two percent?” she asks. “I think servers who are receiving tips directly from customer are not the people who are most vulnerable. It’s the barbacks and runners that don’t receive tips directly. They’re people of color and may not be native English speakers.”
White says he went around and talked to people in the industry and found most of them were not in favor of 77. “I have not been informed by any big business people. That’s not who I am or what I represent. I heard from people who were on the fence. It’s critical that we get this thing right. Today, the issue is about wage theft, wage equity and enforcement. I’m open to discussion about compromise.”
Evans calls today “great democracy” and provides historical context for ballot initiatives in the District. “We’ve had 78 ballot initiatives. Of those 78 only 20 made it to the ballot and only 15 passed. The council only changed or overturned four of them.” On the question of overturning the will of the voters, Evans says, “we are elected to deal with the laws. I have no problem in looking at a law and changing it to make it a better law.” He points out that restaurants and hospitality are a huge part of the D.C. economy, making the stakes high. “This is a bad law, this is law that we should repeal, but we’re interested to hear what everybody has to say today.”
Gray is the last councilmember to provide an opening argument. While he says “wage theft shouldn’t be perpetuated or condoned,” he believes 77 would “imperil and undermine” future development in Ward 7 where he says there are only three full-service restaurants: Denny’s, Sala Thai, and Thai Orchid. He theorizes that business owners will go to nearby neighborhoods in Maryland instead, where the tip credit is still in place.
Allen opens by saying he talked to tipped employees “with no boss over their shoulder” and heard from most workers that they oppose 77. The majority of the ward he represents, Ward 6, voted in support of the measure. “I do not take this lightly, which is why you don’t see my signature on the bill,” he says.
Further background from print stories: