The Washington, D.C. City Council has officially repealed Initiative 77, a measure aimed at phasing out the minimum wage for tipped employees.
After its final vote Oct. 16, the City Council officially overturned the measure, following a 5-month-long fight on its fate. The measure, originally expected to take effect this month, would have changed and complicated the way local restaurants compensate their tipped employees.
The current minimum wage in D.C. is c $12.50 an hour and expected to rise to $15 by 2020. Servers, bartenders and other tipped employees typically get paid less because they receive additional compensation through gratuities, or the “tip credit.” According to the way the tipped-wage system operates, employers are required by law to make up the difference when an employee doesn’t earn enough in tips to reach the minimum wage.
Hundreds of restaurants and bar owners in D.C. opposed the measure, saying their tipped employees usually earn more than the minimum wage. The argued that eliminating the tipped-wage system for a universal wage would cause more problems than it solved, resulting in retention problems and increased labor costs.
Originally, voters passed Initiative 77 in June. At that time, the Restaurant Association of Metropolitan Washington spearheaded a campaign to overturn Initiative 77, which the National Restaurant Association helped support. Kathy Hollinger, RAMW’s, president and CEO, said that if the initiative was enacted, it would hurt D.C.’s bustling restaurant growth as well as potential employment in the local restaurant industry.