Washington, D.C. voters have approved an initiative that will gradually phase out the tip credit in the District. Known as the Increase Minimum Wage for Tipped Employees Measure, Initiative 82 passed on November 9, 2022 and will eliminate the tip credit by 2027, at which time employers must pay their tipped employees the full minimum wage.
The current minimum wage in the District of Columbia is $16.10 per hour. Under D.C. law, however, a hospitality employer may take a tip credit of up to $10.75 against its minimum wage obligations by paying tipped employees a cash wage of $5.35 and using the employee’s anticipated tips to cover the difference.
The tip credit may also be applied against the wages of tipped employees who work outside of the hospitality industry, such as hairdressers, valets, bellhops, barbers and nail stylists.
As long as the tipped employee’s $5.35 hourly cash wage plus their hourly tip earnings (averaged weekly) meets or exceeds the minimum wage of $16.10 per hour, the tip credit is proper.
Initiative 82 will gradually phase out the tip credit by reducing the acceptable tip credit year over year until it is eliminated, thereby raising a tipped employee’s minimum hourly cash wage before tips. By 2027, employers will no longer be able to take a tip credit and will be required to pay tipped employees...
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