Restaurants are closing at a record pace of two per week this year, according to midyear estimates from the Restaurant Association of Metropolitan Washington.
The restaurateurs’ trade group blames the trend on a 2023 law that raised the minimum wage for tipped employees, a move the D.C. Council plans to reconsider in a budget vote on Monday.
Known as Initiative 82, the law has doubled the hourly salary of restaurant servers before tips and includes yearly increases that could double it again in the next two years.
“These aren’t poll numbers or opinions,” Shawn Townsend, the restaurant association’s CEO, said Wednesday. “They are hard data that show the devastating impact of Initiative 82 in the District.”
According to the report, 53 restaurants have closed this year, nearly double the 28 that folded during the same period in 2024. That puts the nation’s capital on pace to surpass 100 closures by the end of 2025, breaking last year’s record of 73.
Meanwhile, an analysis from the National Restaurant Association shows D.C. full-service eateries have cut more than 900 jobs since March, a 2.8% staffing decline.
Restaurants in the city now have 300 fewer jobs than in May 2023, when the law took effect.
By contrast, the industry added 4,000 jobs during the 12 months leading up to May 2023 — a 16% increase — as it rebounded from the COVID-19 pandemic.
Monday will be the second time the D.C. Council has weighed requests to abolish Initiative 82.
On July 14, the Democrat-controlled council voted 7-5 to remove a repeal of the law from Mayor Muriel Bowser’s proposed fiscal 2026 budget, but pledged to find a solution soon.
Initiative 82 eliminates a tax credit that lets tipped waiters earn less than other hourly workers because of the assumption that they will supplement their pay with gratuities.
D.C. voters approved it by a large margin in 2022, bumping the city’s tipped employees’ minimum wage from $5.35 an hour to $10 the following spring.
The law includes periodic increases to bring tipped employees’ wages to the same floor as nontipped workers’ wages — currently $17.95 an hour and rising — by 2027.
The D.C. Council paused a second increase in tipped employees’ wages from $10 to $12 that was scheduled to start this month.
Hundreds of restaurants have asked the council to accept Ms. Bowser’s proposal to revert to an inflation-adjusted minimum of $5.95 an hour before tips.
Several council members have declared their reluctance to roll back the minimum, however. It remains unclear whether city lawmakers will cancel future scheduled increases.
One Fair Wage, an advocacy group supporting the law, has accused the mayor and business owners of exaggerating restaurants’ woes.
“The fact is restaurants open and close every year,” Saru Jayaraman, One Fair Wage’s president, said Thursday.
But Yesim Sayin, executive director of the nonpartisan D.C. Policy Center, which tracks local business sentiment, said Initiative 82 has made it harder for local restaurants to survive Biden-era inflation and other economic pressures.
“The cumulative impact is significant,” Ms. Sayin said. “Wage expenditures are now rising much faster than the overall cost of living.”
• Sean Salai can be reached at ssalai@washingtontimes.com.