In our July 9, 2018 post we reported that a seven-member majority of the D.C. Council had introduced a bill, Bill 22-0913 (Tipped Wage Workers Fairness Amendment Act of 2018) to repeal Initiative 77, an initiative that District of Columbia voters approved on June 27, 2018 that would incrementally increase the minimum cash wage for tipped workers to $15.00 per hour by July 1, 2025 and effectively eliminate the tip credit starting July 1, 2026. We also noted that no further action would occur until this Fall due to a two-month summer recess.

The Council is now back in session and on October 2, 2018, gave initial approval to repeal Initiative 77 by a margin of 8-5. In so doing it rejected a proposed compromise that would create an exemption under Initiative 77 for servers and bartenders, who had expressed the most opposition to the measure, while keeping the minimum wage hike for other categories of workers such as parking lot attendants, hotel bell-hops, and restaurant workers who share gratuities, who proponents of Initiative 77 claim do not earn enough tips to reach the standard minimum wage. However, the repeal bill will not be effective until it is approved by the Council at a second vote, at which there could be additional amendments before it becomes final, and after signature by the Mayor and a Congressional review period.

The Council also passed emergency legislation, Bill 22-0992, the Tipped Wage Workers Fairness Emergency Amendment Act of 2018, which revokes the increase in the tipped minimum wage from $3.89 to $4.50 as of July 1, 2018 contained in Initiative 77 as of October 9, 2018, the same date that Initiative 77 is otherwise scheduled to become effective. This emergency legislation will take effect immediately upon approval by the Mayor and is good for up to 90 days. Thus, employers need not worry about any increase in the tip minimum wage taking effect while the repeal of Initiative 77 remains in process.

Notably, some aspects of the proposed compromise were added to the repeal legislation, although, the Council will have to budget funds in order for these provisions to take effect. These include:

(1) a mandate that the Mayor create a website outlining the rights and benefits guaranteed to an individual under ten different District labor and anti-discrimination laws, and provide employers a poster with information about the website as well as a description of employee rights under the District’s labor and anti-discrimination laws (this apparently would replace most, if not all, of the current required posters);

(2) a mandate for businesses with tipped workers to require annual training on sexual harassment and minimum wages for all owners, operators and managers;

(3) a requirement that all businesses with tipped workers utilize a third-party payroll company to prepare their payroll and provide a quarterly wage report showing hours worked, total pay and gratuities received, and average weekly wage for each employee;

(4) establishment of a dedicated phone line for reporting violations of tipped wage laws;

(5) establishment of a Tipped Workers Coordinating Council (TWCC) consisting of representatives of several District government agencies, the Restaurant Association of Metropolitan Washington, The Hotel Association of Washington, two Mayoral appointees from policy organizations, and three Council employees; the TWCC is to work on coordination of tipped worker polices, conduct regular and anonymous case reviews of tipped wage violations, and develop protocols to ensure recommendations are incorporated into DOES policies and procedure; and

(6) a public education campaign to raise awareness and educate the public about the rights of tipped workers.

There are likely to be amendments to these provisions at the second vote session.

In our June 28, 2018 post on District of Columbia voters approving Initiative 77, which would incrementally increase the minimum cash wage for tipped workers to $15.00 per hour by July 1, 2025, and effectively eliminate the tip credit staring July 1, 2026, we noted the possibility of action by the D.C. Council to amend or overturn it. Consistent with the opposition to the initiative previously expressed by a majority of the Council, on July 9, 2018, a seven-member majority of the Council introduced a bill (Tipped Wage Workers Fairness Amendment Act of 2018) to repeal Initiative 77. As the Council is now on a two-month summer recess, no further formal action will occur until the fall. Furthermore, considerable publicly expressed opposition to repealing a voter-approved initiative may lead to a compromise that extends the phase-in period or otherwise modifies the terms of the initiative, rather than a complete repeal. Meanwhile, two federal Congressmen have sponsored a budget rider barring spending funds to implement the initiative, although such efforts often fail. In short, it appears the future effectiveness of the initiative will remain in doubt for some time.