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The Case for Eliminating the Tipped Minimum Wage in Washington, D.C.

In collaboration with the National Employment Law Project (NELP), ROC United released “The Case for Eliminating the Tipped Minimum Wage in Washington, D.C.” in May 2016.

The report responds to legislation to raise D.C.’s wage floor to $15 and increase the subminimum tipped wage to 50 percent of the full minimum wage proposed by Mayor Muriel Bowser and the Council of the District of Columbia. While an improvement compared to current law, the Mayor’s proposal would nonetheless leave behind a significant number of low-wage workers—namely, the nearly 29,000 workers in D.C. that work in predominantly tipped occupations.  Under the current law, employers can pay these workers just $2.77 per hour, as long as tips cover the difference between the regular minimum wage and the subminimum tipped wage.

Being forced to rely largely, or entirely, on tips for income, D.C., tipped workers unsurprisingly experience poverty at nearly twice the rate of other D.C. workers,  and women feel the impact of the tipped minimum wage most acutely—women are twice as likely to live in poverty as the male tipped workers.  And despite the restaurant industry’s claims that tipped servers and bartenders earn high incomes in D.C., the median wage for tipped servers was just $9.58 per hour, including tips, between 2012 and 2015, according to the Bureau of Labor Statistics.  This median wage is just slightly higher than the full minimum wage for that period.

ROC-DC member Jessica Martin knows all too well the hardships of living off tips: “Working over 50 hours a week I still never received a paycheck because my wages were too low to cover taxes. We need One Fair Wage to lift thousands of DC workers and residents out of near poverty conditions and institutionalized worker discrimination.”

Tipped workers’ reliance on tip for income also forces them to tolerate sexual harassment and other inappropriate behavior from customers, co-workers, and management.  Workers in states with a tipped minimum wage like D.C. are twice as likely to experience sexually harassing behavior in the workplace, and over 90 percent of restaurant workers surveyed in D.C. reported experiencing some form of sexualized behavior while at work.

The evidence is mounting that the restaurant industry is thriving in cities such as San Francisco, Seattle, and SeaTac, Washington—all of which have approved a $15 minimum wage for all workers, including tipped workers.  Since Seattle passed its trailblazing $15 minimum wage, the number of food services and beverage industry business licenses issued by the city has increased by 6 percent.  The evidence also shows that a One Fair Wage system will not lead to the elimination of tipping or significant drops in tipping rates. The restaurant industry in D.C. can afford “One Fair Wage”—that is, the elimination of a subminimum wage for tipped workers in favor of one fair wage for all workers.

Find the full report here.