On Nov. 7, 2022, voters in Washington D.C. voted overwhelmingly to phase out by 2027 the tipped employee credit that employers are currently allowed to take when paying its tipped employees. Measure 82 was approved by over 71 percent of the voters.
The Details:
Under current law, D.C. employers of “tipped workers” may take a credit of $5.05 against tipped wages received by workers to satisfy the minimum wage guaranteed to all workers by law.
Under Measure 82, the tipped credit would be phased out by increasing the required cash wage that tipped employees must be paid until the cash wage meets parity with the D.C. minimum wage. Measure 82 lays out the following phase out schedule.
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Date
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Minimum Cash Wage of Tipped Employees
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January 1, 2023
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$6.00
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July 1, 2023
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$8.00
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July 1, 2024
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$10.00
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July 1, 2025
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$12.00
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July 1, 2026
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$14.00
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July 1, 2027
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Minimum cash wage paid to tipped employees must be at least the D.C. minimum wage required to be paid to non-tipped employees.
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A similar measure passed in 2018 on a 55 percent vote. However, the D.C. Council repealed. It has been reported that the Council has no intention of repealing the measure passed in November of 2022. ADP will continue to monitor.
Next Steps:
D.C. employers must increase the minimum cash wage paid to tipped employees to at least the amounts noted above on the scheduled dates.
Have Questions?
Please contact your dedicated service professional with any questions.