Under the current system, the tip credit guarantees that servers and bartenders receive the minimum wage but enables tipped employees to earn well above the minimum wage,typically somewhere between $20-40 an hour. Initiative 77 would eliminate the tip credit and upend this system, harming servers and bartenders across the District.
If the tip credit is removed, many restaurants and bars are likely to institute a service charge and eliminate tipping. Under this scenario, servers and bartenders would make an hourly wage – and likely earn considerably less than they do currently. Restaurants and bars facing major increases in labor costs will be forced to cut back employee hours and eliminate positions.
If the tip credit is removed, many restaurants and bars will be forced to increase menu prices and decrease staff size. Tipping helps fuel the high-quality guest service that has become a hallmark of the District’s world-class dining scene. Unfortunately, the changes restaurant and bar operators would be forced to make if the tip credit is eliminated will lead to a more expensive and less pleasant dining experience across the city.
If the tip credit is removed, the vibrancy of DC’s unique dining scene will be threatened. Your favorite restaurant and bar will see a major increase in its labor costs — $11 per hour, per person. In DC, 96% of sit-down restaurants and bars are independently operated. These are the exact businesses that will be hardest hit if the tip credit is abolished. This major labor cost increase, combined with skyrocketing rents across the city, will make it harder and harder for independent restaurants and bars to succeed. Sadly, your neighborhood restaurant and bar will struggle to make it in such an environment.