DC Minimum Wage Bill Likely to Exclude Tipped Workers

The District council seems to be nearly unanimous in raising the minimum wage for most hourly workers to $11.50. But waiters and busboys are likely to get stiffed when the deliberations begin next Monday.

The Council’s Business, Consumer, and Regulatory Affairs is set to report on a bill calling for gradual increases in the minimum wage over a three-year period, eventually giving DC workers one of the highest minimum wages in the country. But the draft legislation excludes a specified wage hike to waiters’, bartenders’, and busboys’ current minimum of $2.77 per hour before tips.

“We have to think of jobs in the restaurant industry not as poverty jobs but as good jobs that can support families in our city,” says Elissa Silverman, an analyst with the DC Fiscal Policy Institute, which supports bringing wages for tipped employees closer to parity with other workers. “We need to think of them as living wage jobs. And it’s difficult when most earnings are in tips.”

Andrew Kline, a spokesman for the Restaurant Association Metropolitan Washington, suggests that raising the minimum wage for servers and busboys is unnecessary in the first place. “Our information is that tipped workers make more than the minimum wage,” Kline says. “There seem to be a lot of advocates pushing for a solution to a problem that hasn’t been identified.” Klein adds that tipped restaurant employees take home between $16 and $22 an hour on average.

The District’s current wage laws do require employers to cover the gap when tipped workers’ gratuities don’t add up, though Kline says that “almost never happens,” (Most restaurant workers are unaware that they can file such claims, Silverman answers.)

“Restaurants have very small profit margins to begin with,” Kline says, citing a petition being circulated by the restaurant association that claims most Washington area restaurants have profit margins of 3 to 5 percent. If minimum wage for tipped workers raised, restaurants would have to consider cutting staff, increasing menu prices, or implementing mandatory service charges in place of gratuity.

“I think there have been some scare tactics by the restaurant assocation,” Silverman says. But the restaurant indusrty set to continue lobbying as the minimum wage bill winds its way through the DC Council, Silverman concedes that full parity between tipped and non-tipped workers is unlikely. “We are asking for the 70 percent, which is similar to a proposal in Congress,” she says.

As written, the bill set to be released Monday would bring DC’s minimum wage up to $11.50 in three increments, increasing $1.25 to $9.50 next July 1 and by one dollar a year over the following two years, reaching $11.50 by July 1, 2016. Officials in Montgomery and Prince George’s counties are working on similar increases to create a regional standard, though at $3.63 an hour Maryland’s minimum wage for tipped workers is already higher than DC’s.

Next Monday’s minimum wage bill will be the first serious discussion of wage policy in DC since last summer’s fight over a bill that would have forced Walmart and other big-box stores to pay their employees a much higher starting rate while leaving other businesses at the status quo. Mayor Vince Gray vetoed it, saying he would prefer to discuss a citywide minimum wage hike. However, he has not given his support to this proposed increase, instead calling for a study on how a raise would affect the District’s economy.