A restaurant industry official has a tip for D.C. Mayor Muriel Bower: Don’t raise the minimum wage for waiters and waitresses.
“This proposal is a worrisome game changer for the tipping system and industry operations,” says Kathy Hollinger, president of the Restaurant Association of Metropolitan Washington. “The effect of this is complicated and, if passed, will ultimately harm restaurant employees instead of helping them.”
The Democratic mayor has proposed raising the minimum wage for tipped workers from the current $2.77 an hour to $7.50 an hour by 2022. She also has proposed to raise the minimum wage for all other D.C. workers to $15 an hour by 2020. The current wage minimum is $10.50 an hour and is set to rise to $11.50 on June 1.
Ms. Bowser presented her wage legislation Tuesday to the D.C. Council, saying it strikes a balance between protecting tipped workers and maintaining the tipping system.
But Ms. Hollinger said that most tipped employees make well above the minimum wage, and that some earn more than managers and salaried staff.
“Not all restaurants will be able to afford the $7.50 base pay plus tips, and many will likely adopt an entirely new compensation method, paying a fixed hourly wage to all employees and applying a service charge to the final bill — and discouraging tipping,” she said.
And with fewer tips comes less pay at the end of the day for servers and bartenders.
“What Mayor Bowser does not seem to understand is that she is effectively demoting a large section of the hospitality workforce to entry-level pay rates by drastically limiting their earning potential,” said Gus DiMillo, who operates the restaurants Penn Commons, District Commons and Acadiana through his company Passion Food Hospitality.
According to the National Restaurant Association, raising the minimum wage — for tipped and nontipped workers — means that increased costs will be passed on to consumers. The association says that 58 percent of the restaurants it represents increased prices after the 2007 national minimum wage increase was enacted, and about 41 percent cut employee hours by 41 percent.
“Many restaurateurs would be forced to limit hiring, increase prices, cut employee hours or implement a combination of all three to pay for the wage increase,” the association said in a statement.
However, Andy Shallal, owner of the Busboys and Poets restaurants, approves of Ms. Bowser’s plan because he believes it will help restaurants eventually do away with the tipping system.
“If I had my druthers, I’d eliminate tipping altogether,” said Mr. Shallal, who also heads the mayor’s Workforce Investment Council.
He suggested an increase in restaurant prices that includes a service charge in lieu of a tip, saying that the price increase initially might be surprising but that diners would pay about the same in the end.
He conceded it will take time to educate consumers and get them out of the habit of tipping.
“At some point it will become obsolete, but weaning a culture off it will take time,” Mr. Shallal said of tipping. “We’re not in that mindset now. A cultural shift will have to happen.”
Ms. Bowser’s minimum wage proposal resembles New York’s, which increases the minimum for tipped workers to $7.50 an hour this year and to $10 an hour by 2018. The Empire State’s recently enacted law raises the minimum wage for nontipped workers to $15 an hour by 2020.
California also recently enacted a plan to raise the minimum wage to $15 an hour by 2022.
In 2014 Seattle and San Francisco became the first U.S. cities to raise the minimum wage to $15 an hour by 2020.
Restaurant group urges Bowser not to raise wait staff pay, citing costs to consumers