The Washington Post

Tipped workers’ pay back on ballot

WOULD RISE TO STANDARD MINIMUM Initiative campaign set to ramp up after legal fight

- BY MICHAEL BRICE- SADDLER AND FRITZ HAHN

After months of legal challenges and behind-the-scenes lobbying, D.C. residents in November will again vote on a controvers­ial ballot initiative that would dramatical­ly change how tipped workers in the District are paid.

The D.C. Court of Appeals on Thursday delivered a fatal blow to Initiative 82’s opponents’ attempts to keep the measure off the ballot entirely, rejecting their request for a hearing before the court’s full slate of judges. Voters will now be asked to decide whether to steadily raise the city’s tipped minimum wage of $5.35 per hour to match the standard minimum wage of $16.10 an hour by 2027.

Those in favor of the change say it would standardiz­e pay for all workers, reducing wage theft while making tipping a “genuine gratuity” rather than a mechanism to subsidize worker pay. Detractors argue that it would further harm the city’s dining industry, which is already suffering from the effects of the coronaviru­s pandemic, leading to higher menu prices and costs while shrinking tips for workers.

If any of that sounds familiar, that’s because it is: A near-identical ballot measure, Initiative 77, was passed by 55 percent of District voters in 2018 but was repealed months later by the D.C. Council. Servers in 2018 routinely sported buttons reading “Save Our Tips,” businesses posted “Vote NO on Initiative 77” signs on doors, and bar and restaurant employees heckled pro-initiative 77 organizers during a raucous public hearing at the Black Cat nightclub. Campaignin­g around Initiative 82 so far has been subdued, if not invisible.

But now, with the legal battle over, organizers on both sides of the debate say the stage is set for a louder, more public campaign with the general election less than two months away.

“We’re gearing up for a six-week education campaign before the election,” said Adam Eidinger, an organizer with the proInitiat­ive 82 D.C. Committee to Build a Better Restaurant Industry. “And I can’t imagine the other side isn’t.”

Like most states, D.C. excludes tipped workers — made up primarily of restaurant servers and bartenders, but also parking valets — from the regular minimum wage, allowing employers to use tips from customers to subsidize

the rest. If gratuities don’t add up to $16.10, the employer is supposed to make up the difference, with anything extra going to the tipped employees.

Eidinger and other advocates had initially hoped residents would vote on changing this system during the June primary, which is key for votes in a heavily blue city like D.C. because it determines the Democratic candidates. But the measure was bumped to the Nov. 8 election after the D.C. Board of Elections in the spring took weeks to determine whether backers had collected enough valid signatures.

Advocates say that delay, in addition to the time and money spent fighting the lawsuits, have hindered voter education efforts. The Committee to Build a Better Restaurant Industry had raised more than $309,000 by July 10, according to campaign finance filings; about two-thirds of those contributi­ons came from the Open Society Policy Center, a lobbying group connected to the George Soros-founded Open Society Foundation­s. The committee has spent more than $303,000, largely on consulting fees.

The measure’s opponents — headlined by the “No to I82” committee, which includes some local restaurant owners and workers — have raised about $312,000 through mid-july. The committee has received more than $120,000 from the National Restaurant Associatio­n, more than $45,000 from the Restaurant Associatio­n Metropolit­an Washington and thousands more from local restaurant groups, including Carmine’s DC and Farmers Restaurant Group, which counts Founding Farmers and Farmers Fishers

Bakers among its six area locations.

Jackie Greenbaum, whose D.C. restaurant­s include Bar Charley, Little Coco’s and El Chucho, is not surprised that Initiative 82 has generated less attention so far than the 2018 effort. Even though she holds the same concerns about the measure as before, she said, many local restaurant­s and businesses this time around are too preoccupie­d with day-to-day operations and staying afloat financiall­y to put much effort into combating the measure.

“A few years back, when you were somewhat stable, you — as a restaurant owner or as management or tipped staff — you had the ability to spend your time fighting something like this if you thought it was not good for the staff and not good for the business,” Greenbaum said. “Now, we’re all hanging on by a string. So nobody really has the time, energy or resources to do that.”

But other restaurate­urs say it’s only a matter of time before advocates on both sides of the issue ramp up their messaging.

“I don’t think the lack of kind of energy around it right now is any significan­t telling of, you know, ‘ This is going to be different than last time’ — from meetings that I’ve been in,” said Eric Heidenberg­er, a partner in the D.C. Restaurant Group, which includes the Bottom Line and Shaw’s Tavern. Many people have been traveling, he notes, Congress hasn’t been in session, and late summer is traditiona­lly the slowest time of year for restaurant­s — but the initiative is still on the industry’s mind.

“I don’t think a lot of people know how vulnerable small operators are in D.C. right now. We’re going through the highest inflation we’ve seen in a long time. Our costs are high,” he said. “It’s like, is this going to be a death blow to a lot of restaurant­s, just given the timing, if this were to pass?”

In recent weeks, the No to I82 committee has set up social media pages to amplify concerns over the measure; the group’s posts so far include testimonia­ls from D.C. tipped workers who say eliminatin­g the tipped-credit system would reduce their take-home pay. On the other end of the spectrum, the Committee to Build a Better Restaurant Industry on Friday issued a call-out for volunteers “to help put up campaign posters around busy intersecti­ons in all 8 Wards of Washington.”

“I just would like consumers to know that the only way for this kind of huge increase to be affordable for restaurant­s is to charge a service charge,” Greenbaum said. “I think there is going to have to be some sort of public education campaign for diners to understand that is what the outcome will be. And if they’re okay with it, fine. If they’re not okay with it, that’s where we’re headed.”

Meanwhile, both sides believe they have the backing of the city’s tipped workforce.

Saru Jayaraman, president of the national advocacy group One Fair Wage, which backed Initiative 77, said national support for eliminatin­g the tipped minimum wage rose during the pandemic as tipped workers across the country were tasked with enforcing coronaviru­s- and masking-related rules. These interactio­ns were sometimes negative or even hostile, affecting customer gratuities.

One Fair Wage, based in Massachuse­tts, is pushing for ballot measures and legislatio­n similar to Initiative 82 in more than two dozen states. Michigan is poised to become the eighth state without a tipped credit. Jayaraman said One Fair Wage has tracked at least 100 D.C. restaurant­s that have already eliminated the tipped credit to recruit new staff, including some businesses that were against the measure in 2018.

“It hasn’t been the same kind of fight in part because so many restaurant­s that fought this before are now paying [increased wages]. I think that’s why [the opposition’s] pathway has been as private as possible, through the courts,” she added. “It’s not been a public campaign of signs and windows and advertisin­g.”

If the measure is approved again by District voters, Jayaraman and other supporters say they are confident the D.C. Council would not vote again to repeal it. The council has shifted further to the left since 2018, and a number of lawmakers who voted to overturn Initiative 77 are no longer on the council, including David Grosso (I-AT Large), Jack Evans (D-ward 2) and Brandon T. Todd (D-ward 4).

Council Chairman Phil Mendelson (D), who led its repeal effort in 2018 and is running for reelection this year, indicated at a candidate forum before the June primary that he would support the will of the voters if Initiative 82 made the ballot. Eidinger said the proponents are asking other members of the council to make a similar commitment.

Citing survey data from early May, Kathy Hollinger, president of the Restaurant Associatio­n Metropolit­an Washington, said the number of D.C. businesses that have transition­ed away from a tipped-credit system reflects less than 7 percent of the city’s restaurant industry. She asserted that the associatio­n’s strong stance on the initiative reflects the views of the city’s restaurant owners.

“I’ve always said to operators: ‘You should have the opportunit­y and flexibilit­y as a small-business owner to operate the way you need to — based on the unique needs of your business — so long as you are doing what you legally need to do by law, for wages and everything else,’ ” Hollinger said. “This idea that we’re proposing an initiative that would change the model for all operators? That takes a lot away from what a small business is.”

The measure’s backers say their focus leading up to Election Day will be to explain to voters how tipped workers are compensate­d and why Initiative 82 would create such a dramatic shift for the District’s restaurant industry.

The measure’s opponents have plans to do the same.

“We made a commitment to our industry to make sure people know what they’re voting in — or not voting in,” Hollinger added. “And what the impact is to people who work and earn their living here in the District.”

“I just would like consumers to know that the only way for this kind of huge increase to be affordable for restaurant­s is to charge a service charge.” Jackie Greenbaum, whose D.C. restaurant­s include Bar Charley, Little Coco’s and el Chucho

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