D.C. Mayor Muriel Bowser proposed Monday a repeal of the District’s new minimum wage law for tipped workers, which she said is suffocating the city’s restaurant industry.
However, city-council leaders suggested the measure may not have the backing of the legislative body.
Ms. Bowser said her fiscal 2026 budget proposal includes returning to the prior system and the one used in most of the U.S., in which waiters, bartenders and similar professions that historically have relied mostly on tips have a separate and much lower minimum wage.
She said this would lower costs for the District’s restaurateurs and strengthen a pillar of the city’s financial portfolio.
“We are a hospitality-based economy,” Ms. Bowser, a Democrat, said at a press event Monday on H Street Northeast. “Following the federal government, it’s the hospitality sector that allows people to buy homes, to put their kids through college, to live here and afford to live here. And if restaurants close, there are no jobs.”
The tipped minimum wage law, often referred to as Initiative 82, was hotly debated by city officials and labor activists before it passed with more than 70% of voters in fall 2022.
The law took effect the following year and has seen the tipped wage, once just $5.35, nearly double to $10. It is scheduled to rise to $12 this summer.
The statute mandates that the tipped minimum wage gradually increases until July 2027 when it matches the District’s minimum wage for all workers, which will jump to $17.95 this summer.
Initiative 82’s passage has coincided with a rocky period for D.C. restaurants.
The Restaurant Association of Metropolitan Washington — a major opponent to the tipped wage increases — said a record 74 eateries closed in the city last year.
Several restaurants have blamed the law for helping force them out of business. That includes Haikan in Northwest, which closed for good Saturday.
“After almost 10 years in Shaw, we’ve made the difficult decision to close our beloved Haikan,” the ramen restaurant said in an announcement. “The challenges of food costs, Initiative 82 and the economic climate in the city brought us to this decision.”
RAMW came out in support of the mayor’s proposal to repeal the tipped wage increases Monday.
Ms. Bowser said it would be negligent for officials to act like the District’s economy is the same as it was when Initiative 82 originally passed.
On top of the challenges for restaurants, the District is forecasting roughly $1 billion in lost tax revenues over the next three years due to President Trump’s downsizing of the federal government.
City leaders are also advocating for Congress to reverse a $1 billion budget cut for this current fiscal year that was tucked into a federal spending law that took effect in March.
D.C. Council Chairman Phil Mendelson, a Democrat, said in a separate media event that the implementation of Initiative 82 has left customers confused.
The chairman mentioned how some restaurants passed along the price increases by automatically adding gratuity to orders, while others have tacked new “service” charges onto tabs.
Mr. Mendelson, who was not a fan of the ballot measure at the time, said he has doubts the mayor’s proposal will win over his council colleagues.
“If it is included in the chairman’s print, I will vote for it,” Mr. Mendelson said about the council’s final markup of the budget proposal. “I don’t know that it will be included in the chairman’s print, because I don’t think the support is there in the council.”
Ms. Bowser expressed confidence her proposal will be favored by the legislative body because she said the council members understand how integral restaurants are to the local economy.
She said she trusts the 73% of voters who backed the ballot measure nearly three years ago to do the same.
“My experience with D.C. voters is when you lay out the facts, then they are supportive of what makes sense for the most people.” the mayor said.
