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In case you missed it, City Paper held a panel discussion on ballot Initiative 77 on May 29 at Black Cat. The measure on the June 19 ballot seeks to eliminate the tip credit, or tipped minimum wage, in the District.
The tip credit allows restaurant operators to keep their payroll costs down by paying tipped workers like servers, bartenders, and bussers a lower base wage of at least $3.33 an hour, asking customers to pay the lion’s share of workers’ wages with tips. If tips do not carry a tipped worker over the standard minimum wage, currently set at $12.50, the employer is obligated to make up the difference. If voters pass Initiative 77, the tipped minimum wage will go up in eight increments until it reaches $15 in 2025.
Five panelists spoke out against 77: Restaurant operators Josh Phillips from Espita Mezcaleria and Jill Marie Tyler from Tail Up Goat; tipped workers Karim Soumah from RIS and Sheena Wills from DC9; and Kathy Hollinger, the CEO of the Restaurant Association of Metropolitan Washington.
Restaurant Opportunities Center United (ROC) collected enough signatures to get 77 on the ballot. They were represented on the panel by ROC-DC Director Diana Ramirez and ROC members Thea Bryan and Venorica Tucker. Wage theft attorney Justin Zelikovitz and candidate for D.C. Council Chairman Ed Lazere were also on the panel supporting 77.
Many questions from the audience went unanswered due to time constraints. Same for questions from the moderators. Over the next two weeks, City Paper will address them.
You have consistently told us that we will still be tipped on top of the minimum wage. So, if you are so adamant about us still receiving tips, how does 77 lessen sexual harassment?
This question was directed at Diana Ramirez, the director of ROC-DC. She says ROC has surveyed thousands of workers in D.C. and across the country, concluding that, “the real source of sexual harassment, especially for women, is having to be solely dependent on tips.”
ROC and Forward Together, an organization that wants all families to be able to thrive, conducted a survey that revealed that tipped female restaurant workers in states where there is a sub-minimum wage are twice as likely to experience sexual harassment as their female cohorts in states that pay one minimum wage to all workers. They surveyed 688 current and former restaurant workers across 39 states for their 2014 report, “The Glass Floor: Sexual Harassment in the Restaurant Industry.”
“With a wage of $3.33, the wage itself is so low it goes entirely to taxes and women must rely entirely on pleasing customers to get tips in order to survive—when a woman receives a full wage plus tips, and she’s not entirely dependent on tips, she can reject inappropriate customer and co-worker behavior,” Ramirez says. She has argued in the past that it’s not just the customer who has power over the tipped employee. So too do managers because they determine who is scheduled for the most lucrative shifts.
Finally, Ramirez says having “One Fair Wage” would benefit restaurateurs. “An employer would no longer have the same incentive to make sure tips are covering the base wage, so they would be less concerned that women look ‘date ready’ so they can make more money in tips.”
While Ramirez connects tipping with a higher rate of sexual harassment in restaurants, she does not address that ROC leaders and members have consistently asserted that tipping will not cease if the tipped minimum wage is eliminated. If tipping continues, it’s unclear how 77 would cut down on the rampant sexual harassment that she says exists in restaurants.
“ROC continues to make contradictory statements about the question of tipping to suit the audience they are addressing,” says Jill Marie Tyler, co-owner of Tail Up Goat. “They have called for the end of tipping out of one side of their mouth while still promising full tips on top of a full minimum wage from the other.”
Tyler believes that upending the current system will throw career paths off and ultimately won’t address sexual harassment. “Tipping does not cause sexual misconduct,” she says. “Sexual predators cause sexual misconduct … It is a problem across all industries. It is our duty as owners and operators to create and sustain safe work environments where our employees feel respected and empowered regardless of how they are compensated.”
“They’re contradicting themselves,” echoes Stephanie Hulbert, a tipped worker who is employed as a bartender at the Tune Inn. She wonders if the sexual harassment rationale would be quite so front and center without the #MeToo movement. “It’s not an issue for me,” Hulbert continues. “We don’t put ourselves out there like that. I definitely don’t … We’ve seen restaurateurs accused of this. It’s not patrons that are the issue.”
You said your work doesn’t deal with “good restaurants” like the ones in this room. Who are the “bad” restaurants then? If they exist, why won’t you name and shame them?
This question was for attorney Justin Zelikovitz, who tries wage theft cases. He made the argument that if employers weren’t stealing wages from their employees, he wouldn’t be in business. Zelikovitz and his partner at DCWageLaw have represented almost 1,000 low-wage workers from different sectors in D.C. and Maryland over the past five years.
Zelikovitz can’t disclose much because most of his cases settle confidentially. However, DCWageLaw did win a trial by jury back in 2016 against Asia 54. The plaintiffs received more than $150,000 in the verdict. DCWageLaw has also handled complaints against Thip Khao, Sushi Taro, Malaysia Kopitiam, and Little Serow.
More recently, on May 10, Zelikovitz filed a complaint against Froggy Bottom Pub on behalf of a pair of siblings who were servers. They say they weren’t paid any cash wages for their work. “Until recently defendants only compensated plaintiffs by allowing plaintiffs to keep a percentage of tips left to them by customers,” the complaint reads.
Combing through federal complaints against District businesses that violated the Fair Labor Standards Act over the past two years, about 40 percent of 97 complaints came from restaurants or bars. These restaurants run the gamut of neighborhoods and price-ranges and include Rasika, Hot N Juicy Crawfish, Panera Bread, Smith Public Trust, Meiwah, Stan’s Restaurant, Saigon Kitchen, and Gordon Biersch.
Complaints like the one against Froggy Bottom Pub are rare within this set; most of the FLSA plaintiffs have job titles like cook or kitchen hand, which typically aren’t tipped positions because “back-of-house” employees don’t interact with customers. These kitchen hands and cooks often allege they weren’t paid a minimum wage or overtime pay. Complaints by “front-of-house” staff like bartenders and servers are less frequent, though the line can blur at smaller operations, according to Zelikovitz, where an employee could both make the pizzas and work the register.
Opponents of 77 say it seeks to give “front-of-the-house” workers a raise, when it’s the workers in the back-of-the-house that seem to struggle most from wage theft.
“I think the tip credit system is inherently difficult to enforce,” Zelikovitz says. “If  passes, it will not be good for my business, which tells me something. If the tip credit goes away, there will be a lot fewer restaurants that get it wrong. It’s not self-interest. It would be good for my clients.”
My concern is the disproportionate impact on small and minority-owned businesses. How will these minority-owned businesses survive if they are already running on small profit margins?
For Fatima Popal, the answer is simple. “Many of us who are small minority or family-owned businesses will need to make some drastic operational changes to survive,” she says. Popal and her family emigrated to the U.S. in 1987 and made D.C. their home. The Popal Group is behind Lapis, Malmaison, La Pop, and Café Bonaparte.
“This measure would have such a dramatic impact on us—our profit margins are small to begin with so we would have to make dramatic changes to our staffing policies, our prices, our staff size, our hours of operation. It’s impossible as a small business owner to see this pass and think we’re going to survive, especially in D.C.”
Popal was 23 when she and her family opened Café Bonaparte in 2003. It was all hands on deck at first. For Popal that meant washing dishes, waiting tables, running the bar, and managing. “God has been great, but it took a lot of time and effort.”
She says if 77 passes, it will reduce the number of minority-owned businesses. “It’s going to hurt us, I’m not really sure many of us will survive,” she reiterates. “We’ll lose the uniqueness of what this city offers. This is what we’re all about—the local, minority-owned businesses. It’s not about the big-box restaurants that are everywhere. No one likes those anymore.”
I live in Ward 7 where we have a higher percentage on average of restaurant workers of color. I dine out several times a week and I’m happy to pay a little more and tip so my neighbors can make a fair wage. Why does the other National Restaurant Association (NRA) think D.C. cannot follow several other states to end the tipped wage?
This question boils down to whether or not it’s fair to compare D.C.to states like Washington, Oregon, and California. Kathy Hollinger, the CEO of the Restaurant Association of Metropolitan Washington (RAMW), believes the comparison doesn’t work. “D.C. is a very unique market where 96 percent of restaurants are independently owned and operated, which is not the case in the other states that have ended the tipped wage,” she says. “Raising the pre-tipped wage in this unique market will impact small businesses, workers, and ultimately consumers negatively.”
RAMW represents about 1,000 local restaurants and food businesses and works with the NRA on some national issues. Hollinger says RAMW diverged from the NRA by supporting the minimum wage increase to $15, but that the organizations are aligned on 77. “We both agree that this initiative will be lose-lose for both owners and workers,” she says.
Rose Previte, owner of Compass Rose and Maydan, explains that part of what makes D.C. an anomaly is that it has two bordering states that will retain their tip credit. “If 77 passes, the skilled workers out there will have no incentive to work in D.C. at all,” she says. “They would have every reason to start working in Virginia and Maryland … The pay would be better and there are plenty of jobs available.”
ROC-DC Director Diana Ramirez counters that D.C. and San Francisco are a fair comparison when looking at transitioning to one wage. “They’re comparably sized cities with a very high cost of living and booming restaurant economies. It’s a natural comparison.”