Owners of at least three of DC’s gay bars have joined representatives from nearly every restaurant, bar and nightclub in the city in denouncing a measure during DC’s Nov. 8 election call calling for an end to self -so-called tip pay system.
The ballot measure, called Initiative 82, calls for ending an exemption to the city’s minimum wage law that allows employers of tipped workers to pay them less than the prevailing minimum wage, but requires them to fill the difference if workers do not earn the equivalent of the full minimum wage through their tips combined with the lower “tip” wage.
DC’s restaurant industry officials argue that ending the tipped wage system, which is in place in all but seven US states, would create economic hardship for their small community businesses, most of them dramatically increasing labor costs at a time when they have not yet fully recovered from the difficulties caused by the COVID-19 pandemic.
They say most tipped workers earn far more than the city’s current hourly minimum wage of $16.10. The current “tipping” lower minimum wage in DC is $5.35 per hour.
“I haven’t come across a single waiter who wants that,” said David Perruzza, owner of Adams Morgan Pitchers and A League of Her Own bars, which share the same building.
“My staff make $30 or more an hour,” he said, noting that all but his small kitchen staff are tip workers. “I pay my workers without tip more than minimum wage,” Perruzza told the Blade. “People who support this don’t know anything about the service industry.”
Like other bar and restaurant owners, Perruzza said ending tipping could cause his payroll to double, which could force him to raise prices and possibly lay off employees, most of whom are LGBTQ. .
John Guggenmos, co-owner of Logan Circle-area gay bars Number 9 and Trade, and Jo McDaniel, co-owner of recently opened Capitol Hill gay bar As You Are, said they, too, believe in the endorsement of the Initiative 82 by voters in November. 8 would have a negative impact on their activities.
Guggenmos said the initiative would also negatively impact consumers as prices would have to be raised and service charges of up to 20% could be introduced to offset higher labor costs. Opponents of the initiative argue that a service charge of up to 20% added to the customer’s bill would encourage at least some to reduce tips.
Ryan O’Leary, a former gay service industry employee who chairs the Committee to Build a Better Restaurant Industry, the organization leading the campaign in support of Initiative 82, disputes the representatives’ claims of the restaurant and bar industry that ending low wage tipping will seriously harm their businesses.
O’Leary told the Washington Blade that tipped workers and the restaurants and bars they work for are doing “very well” in states that don’t have a tipped wage system, including California, where Tipped workers earn $15 per hour minimum wage plus tips.
He said tipped workers in DC and other states where tipped wages are in place have reported that restaurant employers engage in subtle forms of retaliation against workers who demand to be paid the difference s ‘they don’t earn the equivalent of the full minimum wage by tricks.
According to O’Leary, a growing number of DC restaurants and bars are already paying their tip workers the full DC minimum wage or just below the full minimum wage, in part because of staffing shortages caused by the coronavirus pandemic. COVID.
“Those who did this are doing very well,” he said. “Some restaurants are concerned that tipped workers will lose money or lose their jobs if Initiative 82 passes.”
O’Leary also points out that under Initiative 82, the full minimum wage for tipped workers will be phased in over a five-year period, from 2023 to 2027. Proponents of the initiative say this will minimize, if not eliminate, any significant economic impact on restaurants. and bars.
Among those who strongly dispute the arguments made by O’Leary and others supporting Initiative 82 is Mark Lee, coordinator of the DC Nightlife Council, a grassroots organization that champions businesses such as restaurants, bars and nightclubs.
Lee said restaurant and bar owners’ decision to adopt a higher minimum wage is based on market conditions such as staff shortages and that it’s a “good thing” that should be left to the market. . He said Initiative 82 would force companies to raise the minimum wage for tipped employees in circumstances where it is not necessary, and that would hurt both companies and employees.
“Federal data indicates that DC workers in bars and restaurants earn well above the local minimum wage, currently at $16.10 an hour, and earn more than tipped workers in the handful of States that have never had tip credit or have banned tipping. credit over 40 years ago,” Lee told The Blade in a statement.
Lee points to data released by the U.S. Department of Labor’s Bureau of Labor Statistics showing that the average tip worker wage in DC is close to $27 an hour. He says the data shows the average earnings of tip workers in DC under the current system are more than $10 an hour higher than the earnings of tip workers in states that don’t have a tip system. tip payment.
“There’s a reason no state has gotten rid of tipping credit in more than four decades, and that’s because elected leaders know workers are opposed and workers’ wages are going to go down,” said Lee.
“Proponents of Initiative 82 falsely claim that so-called ‘wage theft’ and ‘retaliation’ are rampant and prevalent in local bars and restaurants, while offering no real proof,” Lee said. “First, it is extremely rare that a tipped worker’s base pay and tips do not exceed minimum wage, as the DC Office of Wage and Hour Compliance can attest to,” according to Lee.
“But more than that, no worker would stay in a place if they broke the law, because hospitality jobs are plentiful as the second sector of local employment,” he said.
O’Leary said claims by opponents of Initiative 82 that nearly all tipped workers earn more than DC’s full minimum wage cannot be verified because the DC Office of Employment Services does not failed to enforce a law requiring service-sector businesses like restaurants and bars to submit clerical wage data for all of their employees.
He points to an almost identical measure calling for an end to the tip pay system that DC voters approved in 2018 with a 55% voting margin, which strongly indicates that voters will approve Initiative 82 on November 8.
In a highly controversial development, the DC Council rolled back the 2018 measure, called Initiative 77, on the grounds that most tipped workers did not support it and that it would harm restaurants and bars.
But political watchers note this year that the composition of the DC Council has changed since it overthrew Initiative 77 in 2018 and the current Council is expected to allow Initiative 82 to become law if voters approve it this time- this.
DC Mayor Muriel Bowser and DC Council Chairman Phil Mendelson, who supported the decision to cancel Initiative 77 in 2018, each said they would not support an attempt to cancel the Initiative 82 if DC voters approve it next week.