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From the Publisher's Desk...

Initiative 77 on the Block: What to do?

On Monday, September 17th, the City Council will be holding a hearing in the John A. Wilson Building, starting at 11 a.m., to hear from public witnesses for or against Bill 22-913<http://lims.dccouncil.us/Legislation/B22-0913> which outright repeals the Minimum Wage Amendment Act of 2018, enacted by the council on June 29th following approval of Initiative 77 by 55% of the voters who participated in the June 19th primary.

As we commented in April,<http://intowner.com/2018/04/14/restaurant-bar-workers-to-be-hurt-if-tipped-wage-system-eliminated> in this space, “[p]erusing the actual text of Initiative 77, especially at the start, one might believe that its purpose is to establish a new, higher [universal] minimum wage scheme. If that was all that it is, then indeed, it is a good thing. However, that scheme was put into place by the city council two years ago. What is actually going on here is that the language of the Initiative is doing nothing more than amending the already mandated higher minimum wage to allow for the elimination of the tip wage credit system.

In retrospect, this writer thinks Chairman Mendelson, who is the lead sponsor of the repeal bill, stated the problem best in his August newsletter

“Initiative 77 was explained on the ballot and in pro-Initiative literature as legislation to raise the minimum wage to $15 an hour [by 2025], and to raise the wages of tipped workers to $15 per hour.

“Unfortunately, this was misleading, as current law already requires a $15 minimum wage. And current law requires that tipped workers get the same hourly amount as the minimum wage.

“The situation is confusing, however, because tipped workers get a ‘tipped wage’ which is considerably less. They get this regardless of how much they earn in tips. If their tips, when combined with the tipped wage, don’t equal or exceed the minimum wage, their employer is required to pay the difference, to ensure that tipped workers are earning the full minimum-wage. Importantly, if the employee earns more, even far more, than the minimum wage in tips, the employer is still required to pay the ‘tipped wage.’”

We blame the Board of Elections for having allowed the proponents’ misleading characterization that tipped workers are being denied the minimum wage and are thus economically disadvantaged if their tips fall short to be reflected in the wording on the ballot itself, which read, in part, “. . . this Initiative will . . . increase the minimum for tipped employees so that they receive the same minimum wage directly from their employer as other employees. . . .”

What made this language printed on the ballots so misleading is that it conveyed a message that tipped workers at present do not receive at least the minimum wage, yet, as pointed out by us in April and again in this commentary, simply not true.

The other misstep — and this might be a shared failure of both the elections board and the council — was to have this presented for a vote on primary election day in the middle of June, a time when many voters would already have been on vacation and certainly very many would not even be voting because they assumed they could only do so if registered in a party with candidates on the ballot.

Our supposition seems to be borne out by the fact that of DC’s 479,723 registered voters, a mere 18% showed up to vote –- the lowest turnout in nearly a decade when a mayoral candidate was on the ballot. If an issue of such importance is to be voted on, then it should only be on a general election voting day in November (when voters are not likely to be away).

Notwithstanding that the vast majority of the affected tipped workers were opposed to Initiative 77, there were some like the bartender who the Post on June 16th reported as being “shocked by how her bartending income plunged by half when business was slow” where she worked and was “[t]ired of depending on tips on top of $5 an hour paid to her. . . .” Even though her boss was paying her $1.67 more than the tipped worker minimum wage of $3.33, we have to wonder why she seemingly wasn’t demanding at least the full universal minimum wage guaranteed by law if her tips were below that higher minimum.

For employees like her to be getting cheated, while despicable indeed, that is no reason to toss out an entire system that has been to the overriding benefit of tipped workers for so many years. The way to fix things is for DC government to investigate and prosecute cheating employers. Chairman Mendelson certainly urges that as the way to go, as he wrote in his newsletter message, “Undoubtedly there are some employers who cheat their employees, and don’t pay the minimum wage, but revolutionizing the economics of restaurants is not the solution. In that regard, I applaud Attorney General Karl Racine’s recent lawsuit against a couple of employers for wage theft. I’m unaware of that happening in the past.”

In conclusion, we support repeal of Initiative 77 and if the present system needs tweaking or updating let that be the better approach.