The Washington, D.C., city council voted Monday night to scale back its wage increases for tipped workers after Mayor Muriel Bowser (D) and the restaurant industry pushed to repeal it entirely because of its negative economic consequences for the city’s eateries.
The Democrat-led city council heavily amended its 2022 tipped wage ballot measure, Initiative 82, to reinstate the tipped credit and slow down its wage increases to 75 percent of D.C.’s minimum wage by 2034.
It comes after the city council voted in June to pause the July wage hike set to take effect because of I-82. The chamber voted to halt the wage increase after restauranteurs and workers alike spoke out against it.
“The negative consequences of eliminating the tip credit are undeniable,” said Rebekah Paxton, research director at the free-market Employment Policies Institute.
“With overwhelming evidence of restaurant job losses, workers’ lost tip earnings, and historically high restaurant closures, leaving Initiative 82 as-is was untenable for local restaurants and their employees. This action by the Council is an important first step in fixing the harm caused by Initiative 82, but the road to true relief will require a full repeal of this misguided policy.”
Originally, I-82 was set to raise D.C.’s minimum wage for tipped workers to $15 an hour, the city’s standard for non-tipped employees. The ballot measure passed easily in November 2022 and was considered a victory for progressive activists at the time.
A full I-82 repeal was unlikely to pass D.C.’s progressive city council. But the vote still represents a significant victory for the restaurant industry against a measure that proved disastrous for D.C. eateries. The vote was one of many for Mayor Bowser’s fiscal year 2026 budget, which will require approval from Congress and President Trump during the appropriations process.
Bowser and D.C. restaurants spent months pushing for a repeal of I-82 because of its role in bringing D.C.’s restaurant industry into a crisis. She previously worked with the legislature to repeal a similar ballot initiative in 2018.
Restaurant owners in the nation’s capital are not optimistic about the state of their industry. A survey taken by the city’s restaurant trade group earlier this year found that 44 percent of owners thought they were “likely to close” by year’s end. Several prominent D.C. eateries blamed I-82 when deciding to close earlier this year.
Most workers in D.C. earned less in tips in 2024 compared to the previous year and over half worked fewer hours, according to Bureau of Labor Statistics data cited by D.C.’s restaurant industry association in its survey.
The industry group’s survey also found that 78 percent of tipped workers experienced customer resistance to higher menu prices and 71 percent said either they or a colleague had hours reduced. Over half, 54 percent, said they or someone they know have been laid off and 72 percent noticed higher menu prices impacting tips.
A separate report from the Employment Policies Institute estimated that I-82 cost the restaurant industry 1,000 jobs. The estimate is likely an undercount because it does not factor in staff turnover, reduced shifts, or hiring freezes.
One Fair Wage, the leading progressive advocacy group for I-82 and similar measures nationwide, accused the city council of behaving in an anti-democratic manner and selling out to corporate lobbyists.
“But instead of honoring the will of the people, Councilmembers sided with a corporate lobby that spreads lies and bankrolls influence. All options are on the table, including referendum and recall, to reinstate One Fair Wage as required by the will of the voters and workers in DC,” said One Fair Wage president Saru Jayaraman.
Left-wing activists believe it is better for workers to receive a standard minimum wage than resort to depending on the generosity of customers. The average American customer tips 15 to 20 percent of their bill, but the tip is up to their own discretion.