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District residents voted in favor of eliminating the tipped minimum wage on Tuesday. With all 143 precincts reporting, “yes” led “no” 55 percent to 45 percent.
The ballot initiative phases out the tipped minimum wage in eight increments until it reaches $15 in 2025. Starting in 2026 there will no longer be a tip credit in D.C. All workers will be paid the same minimum wage directly from their employer.
A tip credit allows restaurant operators to pay tipped workers a lower base wage (currently $3.33 in D.C.), with customers paying most of workers’ wages with tips. If tips fail to carry a worker over the standard minimum wage (currently $12.50 in D.C.), the employer is obligated to make up the difference. All but seven states in the U.S. have a tip credit in place.
The implementation schedule for phasing out the tipped minimum wage is as follows:
July 2018: $4.50July 2019: $6July 2020: $7.50July 2021: $9July 2022: $10.50July 2023: $12July 2024: $13.50July 2025: $15
Here’s how the votes broke down geographically, according to the D.C. Board of Elections website.
The debate over Initiative 77 isn’t necessarily over. Because of its unique relationship with the District, Congress has a chance to interfere with the measure during its 30-day review period for D.C. legislation. (Both the House and the Senate would have to adopt what’s known as a concurrent resolution disapproving of the initiative to kill or amend it, and it’s unclear whether a sufficient number of members would support such a move.)
Even if Congress doesn’t act, the D.C. Council could overturn the measure as lawmakers did in 2001 when they repealed term limits that voters had previously approved. Leading up to Tuesday’s vote, a supermajority of the 13-member Council, Attorney General Karl Racine, and Mayor Muriel Bowser said they opposed Initiative 77. Council Chairman Phil Mendelson, who was against the measure, has declined to say whether the Council would seek to overturn or tweak the provisions of the initiative.
There is precedent for overturning such a ballot initiative. The same national organization that got Initiative 77 on the ballot in D.C., Restaurant Opportunities Center United (ROC), used the same approach in Maine. But after the referendum passed, the state overturned it. The November 2016 referendum would have gradually raised the tipped minimum wage from $3.75 to $12 in 2024.
If Congress or the Council does not overturn the measure, diners will likely start noticing changes in a couple of years, according Restaurant Association of Metropolitan Washington CEO Kathy Hollinger. RAMW was one of the biggest contributors to the Save Our Tips campaign, along with the National Restaurant Association. Hollinger fought against the measure, saying it’s not a fit for a city where 96 percent of restaurants are independently owned small businesses.
“When it goes to $7.50 in 2020, that will be the tipping point for a restaurant operation,” Hollinger told City Paper in May. “That’s when they would have to rethink their business model.”
Opponents of 77 said the measure would necessitate adding a mandatory service charge to bills or raising prices significantly to shoulder increased payroll costs. Initiative 77 doesn’t outlaw tipping, but tipped workers who oppose it worry diners won’t tip at the same rate if they see a service charge on the bill or if prices are higher, thus reducing their take-home pay.
Tipped workers who supported 77 were more hesitant to come forward, citing fears of retaliation from their employers or the opposition. But proponents City Paper interviewed stressed that eliminating the tip credit would make wage theft enforcement more clear cut. The current system puts the onus on the employee to speak up when tips don’t carry them over minimum wage. They also point to the seven other states without a sub-minimum wage, where they say tipping hasn’t stopped.
Diana Ramirez, the director of ROC’s office in D.C. told City Paper in May that she’s confident restaurateurs will find a system that works. “They think if workers do better, the restaurant will do worse, but there’s a win-win for everyone in this scenario,” she says. She calls the idea that diners will stop tipping “unfathomable.”
ROC also made two social arguments against tipping. “It’s a racial justice issue for us,” Ramirez says. “The practices of tipping are a legacy of slavery. And the most important issue is that the two-tiered wage system is the highest source of sexual harassment.”
At a last-gasp protest Monday night, tipped workers opposed to Initiative 77 demonstrated at the intersection of 16th and U Streets NW. There was cautious optimism among them.
“I feel like we’ve been able to reach a lot of people,” Laura Pacholkiw, who works at Sudhouse, said. Pacholkiw said it was a hurdle to get voters to understand that she didn’t want a raise. “Every one of us is for higher wages, but the intricacies of D.C. restaurant business means this is going to put a lot of of us out of business. A lot of small restaurants are going to close and we don’t want to see that. We want to give the same good service we’ve always given. Initiative 77 is not a solution.”
“I feel confident, I think we’ve closed the gap,” Karim Soumah, a server at Ris, said at the demonstration. “We didn’t have much time to prepare for this. I’m proud of the way everyone has mobilized.” He’s also ready to take this fight to the next level. “We do have the supermajority of the Council on our side, the attorney general on our side, the mayor on our side, so if we have to go to another phase, we’ll be prepared for that as well.”
This story has been updated with election night reactions:
Restaurant Opportunities Center United leaders and One Fair Wage campaign volunteers were at the Busboys and Poets in Brookland when they found out they won.
“Voters saw through the misguided, misinformation campaign from big business and big trade lobby, and D.C. voters saw through all that,” ROC’s Diana Ramirez says. She says even the name of the “Save Our Tips” campaign was a lie. “The initiative has nothing to do with tips. It should’ve been called, I don’t know, ‘Save Our Profits,’ or something.”
Ramirez continues, “This was definitely a David and Goliath campaign … It’s about women of color standing up and coming together and you can see that in Wards 7 and 8 … because those are exactly the people this initiative was meant to help.”
Meanwhile, tipped workers and restaurant owners who fought 77 gathered at Vinoteca on U Street NW before moving the party to DC Reynolds. The mood remained upbeat despite the loss.
“I feel elated that in a very short amount of time, restaurant workers came together in a way that they turned the narrative,” says Andrew Shapiro, a server at Dino’s Grotto in Shaw. “We’re going to go to the Council to overturn this. The city doesn’t want this. It was shadily handled.”
Justin Robinson, a server at Rose’s Luxury, also expects to take the fight to the Council. “It would have been great to win today, but I think about seeing the poll that Ed Lazere commissioned that was 70 percent to 30 percent,” he says. “For us to close the gap in a couple months is a pretty big deal.”
Robinson volunteered at the polls today and thinks he flipped some voters from yes to no. “The fight continues from here. Our next step is to go to the Council and say, ‘Maybe we can put together a better proposal than this blanket proposal put forward by ROC.’”
“I feel alright, this is a much better margin than we were expecting from the beginning,” Lauren McGrath from DC9 adds. “We needed seven councilmembers and we’ve got 10.” Still, the Council’s next steps are not immediately clear. On Tuesday night, Mendelson, the chairman, said he was not surprised that the measure passed given early polling, but declined to comment on whether the legislature would change or annul it.
RAMW’s Kathy Hollinger was also at Vinoteca. She released a statement when the results first came in that says she does not see Tuesday’s vote as the end of the discussion, but the beginning.
“We cannot accept as final a vote in a primary election, in the middle of the summer, on a ballot measure the language of which was, at best, misleading,” it reads. “Unaffiliated voters, Republicans, and even many Democrats had little reason to participate in the process, which is why turnout was historically low, and fewer than 10 percent of the District’s more than 100,000 non-Democratic voters bothered to vote.”
She says they will “immediately begin discussions with District elected officials.”