D.C. Council Signs Off on a Tipped-Wage ‘Compromise'

Eater

4 days ago

The city's nearly decade-long debate on how to pay tipped restaurant workers came to a head around dinnertime on Monday, July 28, when the D.C. Council narrowly voted (7-5) for a new 'compromise' amendment to keep the tipped wage in place, for now, without stripping Initiative 82 entirely.
For Jonathan Nelms, the owner of D.C.'s first Georgian restaurant Supra, 'I-82 has been the biggest contributing factor to our going from being a profitable restaurant to losing money last year.' But proponents of the hotly contested issue say Monday night's move essentially waters down the D.C. voter-approved ballot initiative that was designed to bring the base wage for tipped workers up to the level of the minimum wage by 2027.
The newly passed amendment partially repeals Initiative 82, a contentious law in effect since 2023 that would have eventually eliminated the city's 'tipped minimum' wage and would require employers to make up for the rest.
If I-82 went on as planned, the tipped minimum wage would have gone up from $10 to $12 on July 1. The D.C. Council paused that increase during an emergency vote in early June.
Under the newly passed amendment co-sponsored by councilmembers Christina Henderson and Charles Allen, the current base wage for tipped workers will stay put at $10 until July 2026. After that, it will slowly tick up every two years as a percentage of the regular minimum wage until it reaches 75 percent of the full minimum wage by 2034.
There were a number of last-minute amendments on the overall 2026 budget bill, but the partial repeal of pay equity for restaurant workers sparked a chaotic uproar inside the Wilson Building. Those in support of keeping I-82 in its original form swiftly disrupted proceedings with a shouting match, causing Council chair Phil Mendelson to call upon D.C. Protective Services police force to clear protestors from the building and lock down the chambers.
Smaller restaurants did not embrace 1-82, and owners came out of the woodwork in full force for a marathon testimony hearing in June that lasted well over eight hours. Eric Heidenberger, whose hospitality group runs of Shaw's Tavern, 801, Prost DC, Madhatter, the Bottom Line, and Vagabond, says I-82 has 'made it near impossible for a small, independent operator to make ends meet,' noting a few of his locations have experienced a 30-percent decline in customer foot traffic since I-82's implementation.
American standby Brookland's Finest closed after a decade this spring, in part, due to payroll challenges Initiative 82 presents. Brookland's Finest
'The decline in sales, coupled with a doubled increase in labor costs, has put a significant strain on the viability of our D.C. operations,' he says. If I-82 stayed as is, he anticipated having to close half of his D.C. portfolio.
'Plenty of businesses, both longtime and newly opened, tell me the math just doesn't work, and others say they're simply not going to open up any more restaurants here,' said Allen, ahead of the Monday night vote. 'This [amendment] is a step that we can take that provides several years of stability.'
The new law will also require D.C. Council to stay on top of economic trends that affect the restaurant industry, including employment and wages, by conducting a bi-annual study.
The polarizing topic has been a hot-potato agenda item for the D.C. Council for three months now. In early May, Mayor Muriel Bowser announced her 2026 budget proposal would include language to repeal I-82, which won by a 74-percent landslide at the D.C. polls in 2022. Supporters believe the measure would reduce restaurants' wage violations and boost pay.
Opponents like Restaurant Association Metropolitan Washington argue it hurts independent operators, slashes pay for some servers, and spikes labor costs. Several D.C. restaurants like Sticky Rice, Haikan, and Brookland's Finest cited the existing measure, among other financial hurdles, as part of the cause for their recent closures.
Way back in 2018, I-77 – a similar voter-approved ballot initiative that would gradually eliminate the tipped wage – was struck down by D.C. Council.
While RAMW still favors a 'full repeal' of I-82, its newly amended language that slows down wage hikes is 'a win for the industry' that addresses the 'need to bring greater balance to a policy that has contributed to record closures and job losses … and provides operators with more clarity and a stronger foundation to plan for the future.' RAMW embarked on a campaign to roll back I-82 in recent months, releasing results from a recent poll of 400 D.C. voters who say Initiative 82 has hurt (46 percent) rather than helped (9 percent) the independent restaurant industry in D.C.
'No one is 100-percent happy here. We want workers to be able to have the annual wage growth and restaurants to be able to have more manageable labor costs, and we think that this strikes the balance,' says Ward 2 councilmember Brooke Pinto, who voted 'yes' on the amendment.
Fair Price Fair Wage, an advocacy coalition that includes local restaurant workers' union Unite Here, is furious over I-82's partial repeal.
'How many times do D.C. voters have to approve this before it actually happens?' said One Fair Wage president Saru Jayaraman, in a statement on Monday. 'This isn't just a rollback of wages — it's a rollback of democracy. Councilmembers sided with a corporate lobby that spreads lies and bankrolls influence.'
Advocates are now fielding options like ballot referenda to recall efforts and voter education campaigns to reinstate I-82 in full. Ward 4 Councilmember Janeese Lewis George agrees that overturning the will of the voters was not the way to go and says not all restaurant failures can be fully attributed to I-82. 'It is not our job to remove all risk from the restaurant industry,' she says.
Other U.S. cities like Chicago are also dealing with impacts of the hotly debated ordinance, and Massachusetts voters recently rejected a tip credit elimination and minimum wage hike law.
Jonathan Nelms, owner of Georgian restaurant Supra and longtime D.C. resident, spoke out at the June hearing about the motives behind enforcing I-82.
'Why did the government feel the need to get involved in private enterprise? I don't think you did. I think an out-of-state organization came in and ran these campaigns for deceiving initiatives that have fooled D.C. voters twice,' he says. 'They all failed to understand that we as restaurant owners have to pay the difference, the tip makeup.'
D.C. chef Rock Harper, who runs fried chicken joint Queen's Mother, echoed that sentiment as a small business owner who's far from a Stephen Starr.
'I wish I was a part of this 'millionaire class.' I live in a little joint across the bridge. I've worked almost 30 years to try to get my business up and this [I-82] thing is hurting us and not working the way it was intended,' he says. He reveals he lost $40,000 in December, and I-82 was one big factor as to why.
The early years of I-82 has also impacted Better Hospitality Group, which runs Boardwalk Bar & Arcade, Easy Company, and Takoda. 'Our longest-standing team members have left the D.C. hospitality market and our current team members are struggling to get by due to decreased tips and the limited number of shifts we have available,' says CEO Ryan Seelbach.
'We're reaching the point of the $35 hamburger. It's not sustainable.' — Andrew Kline, Partner vertias
He says I-82 has left owners like himself with three options: decrease staffing levels, on top of raising menu prices or adding service fees to guest checks; or close.
Veritas Law co-founder Andrew Kline, who represents many of RAMW's members, also broke down the pitfalls of I-82 during the June hearing. 'You can't triple front-of-house wages without having a replacement source of revenue,' he says. 'The numbers are astronomical. I mean, we're reaching the point of the $35 hamburger. It's not sustainable.'
Northern Virginia-based data firm MarginEdge, which represents about 600 small restaurant owners in D.C., tracked a nearly 16-percent average spike in D.C. menu prices from May 2023 (soon after I-82 went into effect) to July 2025. (While MarginEdge can't directly attribute these increases to I-82, it notes that 'prices have risen significantly over that same period.')
'The reality is, there's not a playbook,' says MarginEdge CEO Bo Davis, who also runs local sushi chain Wasabi. 'Prices on menus are going to have to be higher in D.C. than other markets. It's challenging for people to swallow.'
The budget will now go to Bowser, and the bill will be sent to President Donald Trump for submission to Congress for final approval.
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