On November 8, 2022, Washington D.C. voters overwhelmingly passed Initiative 82 or the “District of Columbia Tip Credit Elimination Act.” As a result, the tip credit for D.C. tipped wage workers will be gradually phased out by 2027, at which time employers must pay their tipped employees the applicable D.C. minimum wage rate and eliminate the use of any tip credit.
Current State of the Use of Tip Crediting in D.C.
The current minimum wage for tipped workers in D.C. is $5.35 per hour. Employers may take a tip credit of up to $10.75 per hour by using the employee’s tips to cover the difference necessary to satisfy D.C.’s minimum wage, which is currently $16.10. Employers of tipped workers must also provide notice to employees of tip policies, including any tip-pooling procedures, and comply with the District’s quarterly reporting requirements as they relate to employees for whom a tip credit is taken.
Initiative 82
Initiative 82 will gradually phase out the tip credit by reducing the tip credit yearly (including twice in 2023), until it is eliminated entirely in 2027. During this time, the minimum hourly cash wage will simultaneously increase until it matches D.C. mandatory minimum wage. Beginning January 1, 2023, the tip credit will be phased out on the following proposed schedule:
| Date | Maximum Tip Credit | Minimum Regular Cash Wage |
| January 1, 2023 | $10.10 | $6.00 |
| July 1, 2023 | $8.10 | $8.00 |
| July 1, 2024 | $6.10 | $10.00 |
| July 1, 2025 | $4.10 | ... |
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