D.C. Council approves initial vote to repeal Initiative 77, the tipped hourly wage increase

On Tuesday, the D.C. Council preliminarily approved a measure to repeal the voter-approved Initiative 77, which sought to raise tipped workers’ hourly wages to $15 an hour.

The Council voted 8-5 to repeal the referendum, which passed with 56% of the vote in June. Council Chairman Phil Mendelson, an ardent opponent of Initiative 77, and Mayor Muriel Bowser had both gone on record as favoring a repeal.

Opponents of Initiative 77 had argued that increasing hourly wages for tipped workers would reduce the amount of take-home pay that servers get under the current system, where they are paid $3.89 an hour but can supplement the difference between that and the current minimum wage of $13.25 an hour through tips.

Many longtime bartenders and servers have argued that they can make a good living off of tips, which tend to be generous, particularly at higher-end bars or restaurants, meaning their take-home pay exceeds the amount they would gross just being paid the minimum hourly wage.

But proponents of Initiative 77 argued that tipping was an outdated system with racist roots dating back to the post-Reconstruction era, and allowed for huge fluctuations in take-home pay based on factors outside of a server or bartender’s control, such as the weather, seasonal spikes or decreases in business, and whether they were assigned to “good” sections or tables. They also argued that the initiative would not eliminate tipping, but would allow service industry workers to earn a stable, hourly wage while still being able to earn tips as a reward for exemplary service.

Councilmember Elissa Silverman (I-At-Large), who largely became the public face of the pro-77 movement on the Council, floated a compromise measure, backed by Councilmember Mary Cheh (D-Ward 3) — the only elected official to come out in support of Initiative 77 prior to the June primary — and Councilmembers Brianne Nadeau (D-Ward 1), Charles Allen (D-Ward 6) and Robert White (D-At-Large).

Under the compromise amendment, the tip credit would have remained in place for servers and bartenders, increasing to $5 an hour in 2020, with any subsequent increases tied to inflation. Indirectly tipped restaurant employees, including barbacks, food runners, and valet drivers, as well non-restaurant industry employees like nail technicians and hairstylists, would have seen their hourly wage increased to $5 an hour in 2019, with a $1.40 increase each year until the tip credit was completely phased out by July 2030.

The compromise would have created a 24-hour wage theft hotline and website allowing for people to anonymously report employers who refused to pay them, required ABRA to provide extensive sexual harassment training to restaurant and bar employees, requiring all businesses that employ tipped workers to use payroll companies by 2023, and allowing payroll companies to directly file wage data that would be made available to employees.

“In the age of ‘alternative facts,’ it’s unfortunate that our mayor and elected officials aren’t looking at the real facts to make real policy decisions.”

–Diana Ramirez, director, D.C. chapter, Restaurant Opportunities Centers United

The compromise measure also would have created greater incentives for businesses to open in Wards 7 and 8, and the creation of a task force to monitor implementation of the law and report its findings on business, employment, and wage data to the Council to address any lingering issues or problems.

Because several of the additional measures, including those aimed at combating wage theft and sexual harassment, were raised over the past month while councilmembers debated the merits of repeal, Mendelson’s final measure incorporated some of those requirements.

In the end, the compromise measure failed, also by an 8-5 vote.

Silverman said she was disappointed in the failure of her compromise amendment, but hoped that parts of her bill that were incorporated into the final repeal measure would help to address the very real concerns of wage theft and sexual harassment facing tipped workers.

“I felt that the compromise we proposed listened to everyone,” she told Metro Weekly. “It certainly listened to District voters, who approved Initiative 77, it listened to the servers and bartenders who came out in great numbers to say they disagreed with Initiative 77, it also listened to workers like Diya King, who’s a non-restaurant tipped employee, who wanted to see Initiative 77 [pass] because he hasn’t gotten a raise and doesn’t get that many tips from his job.

“It addressed the major issues that Initiative 77 wanted to address, which was why District voters approved it. They wanted to ensure people were paid fairly and equitably in one of our most important industries, and that they can do it free and safe from sexual harassment.”

Silverman noted that she had sought input from various parties and worked to learn more about the problems facing tipped workers throughout the summer, in order to craft legislation that would be amenable to all.She hopes that she and her fellow councilmembers can continue working together to provide oversight and ensure that the provisions designed to protect tipped workers are implemented correctly.

Silverman also expressed a desire to work more closely with tipped workers in the future to craft constructive legislation that would address their concerns.

Diana Ramirez, of Restaurant Opportunities Centers United, the pro-union group that successfully pushed for passage of Initiative 77, expressed her disappointment at the council’s preliminary vote, while noting that members of the One Fair Wage coalition, including ROC United, would continue to try and urge lawmakers to withdraw their support before a second and final vote is held later this month.

“The final vote isn’t over yet, but that’s the direction that they’re heading, and they’re setting a very scary precedent by overturning the will of the voters on such a popular ballot measure,” Ramirez told Metro Weekly in an interview. “The public is watching, and the public saw that the councilmembers who voted for repeal don’t care about their vote. That was a clear signal, and the Council sent a signal that some voters matter more than others, and that campaign donors matter more, in the District.”

Ramirez noted that ROC and other partners within the One Fair Wage coalition had attempted to work with Silverman’s office to suggest a compromise measure that would keep Initiative 77 in place while tinkering with some of the implementation details. But coalition members did not back Silverman’s eventual compromise — even though it contained some provisions they liked — because they objected to exempting servers and bartenders from seeing an increase in their hourly wages.

Ramirez said the coalition was weighing its options, which could include pushing for another ballot initiative during a future election cycle, lawsuits or other legal options, or even mounting recall campaigns against councilmembers who voted to repeal Initiative 77.

“Our members are outraged that a Council as progressive as it claims to be would overturn this vote,” she added. “Our coalition members are reaching out and saying, ‘Who are the councilmembers we need to look in the eye and hold accountable for this?'”

Ramirez also noted that several studies, including, most recently, a study from the Economic Policy Institute released last month, have shown that tipped workers fare better in cities that have passed “one fair wage” initiatives or laws, and that the restaurant industry in those cities has continued to thrive.

“Every study that’s been done to study the effects of an increased minimum wage for tipped workers — EPI, ROC did a study, the DC Fiscal Policy Institute — they’ve all looked at the data and come to the same conclusion: It is beneficial to both workers and business,” she said. “In the age of ‘alternative facts,’ it’s unfortunate that our mayor and elected officials aren’t looking at the real facts to make real policy decisions.”

But even if Initiative 77 is repealed, both sides say the larger issues affecting people in the industry aren’t going away, which means that this — or a similar fight — could be renewed in the future.

Trupti Patel, a bartender who supported Initiative 77, called the initial repeal vote “deeply disappointing.”

“D.C. voters went to the ballot box, and voiced their opinion, which was that they wanted to give tipped workers a raise,” Patel said. “To have a supposedly ‘progressive’ Council, in the nation’s capital, the bedrock of democracy, to say, ‘Your vote doesn’t matter’ is very disheartening.”

Patel said she also did not support Silverman’s compromise measure, but still felt the Council erred in pushing for repeal.

“The public clearly knew what they were voting on,” she said. “To constantly have voices dismissed or disregarded is very frustrating. D.C. residents do not want to be told that their votes and their voices don’t matter.”

“Initiative 77 brought up a lot of valid issues, that our industry needs to work on, but I don’t think [it] was the right step forward”

–Dusty Martinez, bartender and manager, Trade nightclub

Patel also said that the only recourse left for voters who supported Initiative 77 may be to hold the eight councilmembers who voted for repeal accountable by voting against them when they are up for re-election.

“At the end of the day, politicians work for the people. And the people can say, ‘You don’t work for the National Restaurant Association, you work for me. I’m your constituent, and you’re supposed to represent me,” she said. 

Trans United Fund, a national transgender organization that had partnered with One Fair Wage DC to pass Initiative 77, worried about the effect that repeal of the initiative would have on the most marginalized workers, particularly transgender people of color, queer-identifying people, and poor and working-class people who work as tipped employees.

“We were successful in helping I-77 pass by a wide margin,” the organization said in a statement. “We’re disappointed that the D.C. Council is working to undo the will of the people and overturn I-77, and we’re going to keep working hard to make sure tipped workers in D.C. — and all of us –have what we need to thrive.”

Dusty Martinez, a bartender at Trade nightclub who was a vocal opponent of Initiative 77, says he feels like ROC failed to consult with servers and bartenders who might be affected by a change in the wage system prior to launching Initiative 77 — which was why a number of industry workers testified in support of repeal at a Council hearing in mid-September.

“Hopefully, the repeal happens, then we can sit down and  have a conversation about more things that make more sense for our industry, not just $15 and hour,” he says.

“Initiative 77 brought up a lot of valid issues, that our industry needs to work on, but I don’t think 77 was the right step forward. It would help some people, but it would hurt the vast majority of people in the industry,” Martinez added. “If the repeal goes through, we’ll have a better chance to come together as an industry, as a whole, and really address issues that are important to all of us.”