On Tuesday, June 19, 2018, residents of the District Columbia voted to approve Initiative 77, which will incrementally phase out the “tip credit” that many employers use as an offset towards their minimum wage obligations to employees who also earn tips in connection with their work. Presently, the minimum wage in the District of Columbia is $12.50 per hour.1 However, establishments like restaurants, where tipping is common, only have to pay tipped employees $3.33 per hour2—provided that the employees’ direct wages and total tips add up to $12.50 an hour by the end of the week. If the food service worker does not earn enough in tips to reach the $12.50 per hour threshold, then the restaurant owner has to make up the difference. Initiative 77 ends this practice.
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