Congress Could Ax Higher Tipped Wage for Washington Workers

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By Jon Steingart

Three members of Congress are offering an amendment that would block a Washington, D.C., voter-backed minimum wage initiative involving the tip credit.

Rep. Gary Palmer (R-Ala.) opposes Initiative 77, which local voters approved with 55 percent of the vote June 19. It would require Washington businesses to pay tipped workers the city’s minimum hourly wage regardless of gratuities they receive. The city’s minimum wage law currently lets businesses pay a lower minimum wage to employees who earn gratuities—if the tips are sufficient to raise the workers’ pay to at least the standard minimum.

“Congressman Palmer is offering the amendment because he believes Initiative 77 is bad policy and because the Constitution gives Congress exclusive jurisdiction over the District of Columbia,” Elizabeth Hance, his press secretary, told Bloomberg Law in a July 12 email. Reps. Mark Sanford (R-S.C.) and Mark Meadows (R-N.C.) co-sponsored the amendment.

Delegate Eleanor Holmes Norton (D-D.C.) said the federal lawmakers should butt out of Washington’s local affairs. “Representatives Meadows and Palmer are up to their old tricks again by abusing congressional authority over the District to try to undemocratically impose their views on our residents,” she said in a prepared statement. “As to Initiative 77 on tipped wages, that local issue should be decided solely by D.C., not unaccountable Members of Congress trying to interfere in the District’s local affairs.”

And local lawmakers are addressing the issue. City council Chairman Phil Mendelson (D) is part of a majority of local lawmakers who co-introduced legislation July 10 that would repeal the initiative. Mendelson and his colleagues say they’re concerned that businesses would have difficulty absorbing the resulting higher labor costs, forcing them to restructure operations by cutting staff or raising prices.

“He feels that Congress should let the local process play out,” Lindsey Walton, Mendelson’s communications director, told Bloomberg Law July 12. Mendelson’s bill will lead to legislative hearings during which members of the public can offer input, Walton said.

The federal lawmakers are offering the amendment to appropriations bill H.R. 6147 the House is likely to consider next week.

—Tyrone Richardson contributed to this report.

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