The District of Columbia City Council paused a scheduled increase of the tipped minimum wage that was to go into effect on July 1, 2025, as the District considers possible repeal of the controversial law. Passed by D.C. voters in November 2022, Initiative 82 was designed to phase out the tip credit in favor of an increased minimum wage for tipped employees. The tip credit allows employers to pay tipped employees an amount below the standard minimum wage on the condition that employees receive a sufficient amount in tips (among other requirements). As it stands, Initiative 82 will increase the minimum tip credit over a period of years until July 1, 2027, at which time formerly tipped employees will receive the prevailing minimum wage in D.C.
Initiative 82, however, has been extremely controversial, as some workers prefer to be paid in substantial part on a tipped basis rather than exclusively on an hourly wage rate. Restaurants have also been struggling with Initiative 82 because a higher tipped minimum wage for employees means a reduced tip credit benefit for employers. As a result of the reduced tip credit, some D.C. restaurants have cut hours from employees’ schedules or moved towards automated kiosks.
In response to the controversy, the D.C. Council passed an emergency measure this month to halt the increase in the tipped minimum wage, which was set to increase from $10 to $12 on July 1, 2025.
D.C. Mayor Muriel Bowser has shown interest in repealing Initiative 82, and her proposed budget includes a full repeal. The D.C. Council’s pause of the tipped minimum wage increase is part of an emergency measure, which remains in effect for only 90 days. For now, D.C. employers with tipped employees can pause plans to comply with the scheduled tipped wage rate increase under Initiative 82. They should, however, track developments on Initiative 82 and, before the end of the 90-day pause on September 29, 2025, be prepared to reassess the issue.
Brendan F. Cassidy is an attorney at Praemia Law, PLLC. This article is for general informational purposes only and should not be relied upon or regarded as legal advice. Please contact Brendan Cassidy at brendan.cassidy@praemialaw.com or 703-399-3603 concerning particular facts and circumstances.
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