Washington, D.C., Voters Pass Minimum Wage Amendment Act

By Patricia Mumford, Director, Product Compliance

Published on July 12, 2018

Initiative 77 Update

July 24, 2018

On July 9, 2018, seven members of the DC council introduced legislation to repeal Initiative 77.  The D.C. Council will take up the legislation, titled “Tipped Wage Workers Fairness Amendment Act of 2018,” after it returns from summer recess in mid-September. Because there are thirteen council members, support from seven council members is sufficient to ensure it passes.  Additionally, DC Mayor Muriel Bowser has also been vocally opposed to the measure. It is possible that we may see a law enacted that falls somewhere between Initiative 77 and its repeal, as more than one council member has stated their intent to find a compromise.

In addition to the efforts from the DC council, members of US Congress also introduced a bill that would block Initiative 77 from going into effect.  The District of Columbia is a federal district, not a state.   Therefore, Congress has the power to overturn or amend local laws and spending decisions for D.C. Republican Representatives Mark Meadows from North Carolina and Gary Palmer from Alabama have proposed amendments that would block spending to implement the ballot measure.

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Washington, D.C., voters passed ballot Initiative 77 – the District of Columbia Minimum Wage Amendment Act of 2017 – June 19, 2018, which will increase the base minimum wage for tipped employees and phase out tip credit over seven years, so all workers earn at least $15 an hour by July 2025. Following that, the district would have one minimum wage that adjusts with inflation.

As of July 1, 2018, the minimum wage for non-tipped employees in Washington, D.C., is $13.25.

Tipped employees will receive a wage of $3.89. If he/she does not make $9.36 per hour in tips, employers are required to pay the difference, which is commonly called a “tip credit.”

The tipped wage is planned to increase to $5 as of July 1, 2020, at which point the employer will make up the difference if the worker isn’t earning a $15 an hour wage. At that time, the tip credit would be approximately $10 per hour (D.C. Code § 32–1003.)

While the ballot initiative passed, the effective date is unknown for a couple of reasons. First, Congress could block the measure. The Council of the District of Columbia is the legislative branch of the local government.  and, although it acts like a state legislature, overseen directly by the federal government.

Under the 1973 Home Rule Act, Congress maintains supreme authority over the district. Initiative 77 will, therefore, be sent to Congress for a 30-day review period.  Since the calendar only counts days where Congress is in session, the review may take until the end of 2018.

After the review period, the council and Mayor Muriel Bowser can then amend or repeal it. Ten of the 13D.C. council members, as well as the mayor, oppose Initiative 77.

D.C. joins seven states – Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington – with laws requiring businesses to pay all workers the same minimum wage, regardless of tips. In 2016, Maine voters passed a referendum to eliminate tip credits by 2024. However, the state’s legislators overturned it less than a year later.

This Labor Law News Blog is intended for market awareness only, it is not to be used for legal advice or counsel.

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