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Tomorrow morning at Freedom Plaza across from the John A. Wilson Building begins part two of the hearing held last week on raising DC’s minimum wage and expanding the city’s paid sick days law. Starting around 9 a.m., many workers from our city’s restaurants, retail stores, and other hourly paid jobs will give the testimony they were unable to read on Oct. 28 because they couldn’t stay for the 11 hour hearing. They had to go to work.
Some of these workers receive tips as part of their pay. DC falls into the bottom half of states when it comes to the tipped minimum wage, which is currently set at $2.77. The original intent of the tipped minimum wage was to set it as a percentage of the full minimum wage, but that link has been broken, leaving DC’s tipped workers to get wages of just one-third of the full minimum wage.
A reasonable approach would be to set the tipped wage to at least 70 percent of the minimum wage, as proposed in the federal Fair Wages Act of 2013, and consider phasing out the tipped wage altogether. At least 26 states have a higher tipped minimum wage than DC, including seven which make no distinction between a tipped worker and any other worker. These states include California, Minnesota, and Oregon.
By law, in DC and most states, tipped workers ‘ including restaurant servers, bartenders, nail salon technicians, and even car wash employees ‘ may receive a lower wage because some of their income comes from tips. These workers qualify for a “tipped credit,” meaning that wages plus tips must equal the full minimum wage. If employees do not average at least the full minimum wage over the work week, counting both wages and tips, their employer is required to pay the difference. This is rarely enforced, however.
Initially, the federal tipped wage was tied to the full minimum wage; it was set at half of the minimum wage. In 1980, Congress raised it to 60 percent of the minimum. In today’s terms, that would mean the tipped wage in DC would be $4.95. In 1996, however, the federal tipped minimum was set at $2.13 and has remained frozen ever since, despite increases to the broader minimum wage.
Raising the minimum wage for tipped workers, along with other workers, is important for several reasons. Some servers work in low-price establishments where tips can be very low. Restaurant business can vary from week to week or shift to shift, so that a worker relying mainly on tips could face very uneven income despite having the same bills to pay every month. And freezing the tipped worker minimum wage for a long period of time means that the balance of who pays servers changes over time from owners to patrons. Most of us who eat at restaurants would like to think that tips are adding to our server’s wages, not filling in for low and stagnant pay.
DCFPI’s recommendations include:
- Making the tipped minimum at least 70 percent of the base minimum wage so it increases with any increase to the minimum wage.
- Providing annual inflation adjustments to the full minimum wage, which will allow the tipped worker wage to also rise with the cost of living.
Tomorrow is the last day to submit testimony to the Council’s Committee on Business, Consumer, and Regulatory Affairs. After they deliver their testimony at Freedom Plaza, workers will head to the Wilson Building to deliver it personally. If you can’t join tomorrow’s rally, you can email your testimony to the committee at gfisher@dccouncil.us.
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