Report: D.C.’s Tipped Workers in Poverty at Nearly Twice the Rate of All D.C. Workers, Experience High Rates of Sexual Harassment

D.C. City Council to Hold First Public Hearing on Mayor Bowser’s $15 Wage Proposal, Which Leaves Nearly 29,000 D.C. Tipped Workers Behind, on Thursday 5/26

The report, “The Case for Eliminating the Tipped Minimum Wage in Washington, D.C.” can be found HERE.

District of Columbia – Wednesday, May 25th, one day ahead of the first public hearing on Mayor Muriel Bowser’s proposal to raise the minimum wage to $15.00 and raise the subminimum wage for tipped workers from $2.77 per hour to 50 percent of the full minimum wage, two national advocacy groups are releasing a joint report urging the Mayor to eliminate the unfair “tipped minimum” wage system in D.C. The National Employment Law Project (NELP) and Restaurant Opportunities Centers (ROC) United point out in the report that the tipped minimum wage promotes poverty wages and unstable incomes for a tipped workforce that is disproportionately non-white in D.C.

“Mayor Bowser’s initiative to increase the minimum wage to $15 in D.C. is a step in the right direction,” says Saru Jayaraman, Co-Founder and Co-Director of ROC United.  “But the Mayor’s initiative would leave behind nearly 29,000 tipped workers in D.C. By leaving tipped workers at just half of what the standard minimum wage is for the majority of D.C. workers, Mayor Bowser is sending a strong message to D.C.’s tipped workers that fair pay and fair treatment for them is not a priority.”

“Eliminating the subminimum wage for tipped workers so that their employers must pay them the full minimum wage is a crucial part of any minimum wage increase seeking to make a meaningful difference for low-wage workers,” said Laura Huizar, a NELP staff attorney.  “D.C.’s cost of living is among the highest in the country, and the typical tipped worker in the District is struggling to make ends meet.  The City Council should seize this opportunity to establish a truly fair minimum wage for all D.C. workers.”

Employers under a tipped minimum wage system like D.C.’s are required to make up the difference between an employee’s subminimum wage and the full minimum wage if an employee does not make enough in tips to get to the full minimum wage.  As confirmed by a 2014 White House National Economic Council and U.S. Department of Labor report, employers often fail to “top off” workers’ wages.

Being forced to rely largely, or entirely, on tips for income, D.C. tipped workers experience poverty at nearly twice the rate of other D.C. workers.  Women tipped workers in the District feel the impact of the tipped minimum wage most acutely—women tipped workers are twice as likely to live in poverty as male tipped workers. Despite the restaurant industry’s claim that tipped servers and bartenders earn high incomes in D.C., the median wage for tipped servers was just $9.58 per hour, including tips, between 2012 and 2015, according to the Bureau of Labor Statistics. This median wage is just slightly higher than the full minimum wage for that period.

Tipped worker and ROC United member, Jessica Martin knows all too well the hardships of living off tips: “Working over 50 hours a week I still never received a paycheck because my wages were too low to cover taxes. We need One Fair Wage to lift thousands of D.C. workers and residents out of near poverty conditions and institutionalized worker discrimination.”

Tipped workers’ reliance on tips for income also forces them to tolerate sexual harassment and other inappropriate behavior from customers, co-workers, and management.  Workers in states with a tipped minimum wage like D.C. are twice as likely to experience sexually harassing behavior in the workplace as workers in states that do not have a lower tipped minimum wage. Over 90 percent of D.C. restaurant workers surveyed for the report reported experiencing some form of sexualized behavior while at work.

The report titled “The Case for Eliminating the Tipped Minimum Wage in Washington, D.C.” also demonstrates that the restaurant industry in D.C. can afford “One Fair Wage”—that is, the elimination of a subminimum wage for tipped workers in favor of one fair wage for all workers.  Many states that the National Restaurant Association projects will experience strong employment growth in the next ten years are, in fact, One Fair Wage states where employers must also pay tipped workers some of the country’s highest base wage rates.  Restaurant employment in California—where the minimum wage is now $10 per hour and will reach $15 by 2023, and which has no tipped minimum wage—is projected to grow by 10.1 percent during the 2016-2026 period, for example. Restaurant sales data paint a similar picture—sales in 2016 in One Fair Wage states are projected to exceed the national average.

Cities like San Francisco, Seattle, and SeaTac, Washington, all of which have approved a $15 minimum wage, have strong restaurant industries with growing employment even without a subminimum wage for tipped workers.  Since Seattle passed its trailblazing $15 minimum wage, the number of food services and beverage industry business licenses issued by the city has increased by 6 percent.

Workers and data also confirm that a One Fair Wage system will not lead to the elimination of tipping or significant drops in tipping rates. Seattle tipped worker, Nate Midgley is quoted in the report as saying that he sees no direct “correlation between [his] wages and how much [he] earn[s] in tips.”

The hearing, which will convene tomorrow at 11:00AM is set to bring out D.C. residents and voters from all walks of life, including tipped workers who live and work in the District. Woong Chang, who has spent over a decade in the restaurant industry as a server and bartender, both in D.C. and in California, a One Fair Wage state, says, “The council and business community have said again and again that the sky will fall if we raise wages, ban smoking in restaurants, or provide workers with the opportunity to earn a paid day off. In every single case they’ve been wrong — the sky is not falling and in fact, the restaurant industry nationally is experiencing a boom like never before. It’s time that we ignore the ‘calamity howlers’ and do what’s best for D.C.’s working people.”

Chang, a nine year member and worker advocate with ROC United, has been engaged in the fight to raise the wages of D.C.’s workers through ROC’s local D.C. chapter, which, along with the D.C. Working Families Organization is co-leading a ballot initiative to be voted on at the polls this November to eliminate the tipped credit and raise the wage for all D.C. workers.

Many prominent local employers—including Florida Avenue Grill owner, Imar Hutchins, and Busboys and Poets owner, Andy Shallal—have come out publicly for One Fair Wage. Hutchins said, “The reason why I support minimum wage legislation with elimination of the tipped minimum wage is that it is easier if it is legislated because then it is something that [the whole industry] has to deal with together.”

Additionally, 25 organizations have signed onto a letter urging Mayor Bowser and D.C. legislatures to establish one fair wage for the city’s tipped workers. That letter can be found HERE.


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