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D.C. Council to hold first hearing on repealing Initiative 77, the tipped-wage hike

Diana Ramirez, director of the D.C. chapter of the Restaurant Opportunities Centers United, urges lawmakers not to overturn Initiative 77 on June 14, 2018, a day after voters handily passed the ballot measure. (Reis Thebault/The Washington Post)

The fate of a wage hike approved by voters for servers, bartenders and other tipped workers in the nation’s capital comes before the D.C. Council on Monday.

A majority of the council wants to repeal the measure, which was passed by 56 percent of voters in June, and about 250 witnesses have signed up to testify for what is expected to be a contentious hearing.

Businesses are required to pay tipped workers at least $3.89 per hour under current law, as long as gratuities are enough to reach the minimum wage; if they fall short, employers are supposed to make up the difference. Initiative 77 requires employers to gradually increase hourly pay until all workers are earning the standard minimum wage by 2026. In the District, the standard minimum wage will be $15 by 2020 and automatically increase with inflation.

Don’t skimp on tips yet: A guide to understanding Initiative 77

Restaurant owners and some workers who say the existing system works well have been lobbying for repeal, arguing that increased labor costs would devastate the city’s thriving dining scene.

Progressive activists and others say the two-tiered pay system means some hourly workers are earning less than minimum wage and that voters decided the matter in June and the council should not overturn the will of the voters. But even supporters of the measure acknowledge that the odds are against them.

The council is not expected to act at Monday’s hearing, which is an opportunity for the public to weigh in. The marathon hearing is scheduled to start at 11 a.m. and is expected to stretch into the evening.

“Typically when we pass legislation to further social justice, we help people,” said D.C. Council Chairman Phil Mendelson (D), who is leading the repeal charge, in an interview. “The reason why so many restaurant workers are opposed is they see it very much as reducing the quality of their livelihoods.”

At a private Sept. 10 meeting with restaurant workers opposed to Initiative 77, Mendelson urged them to testify and make the argument for overturning the measure, according to a recording of the meeting obtained by The Washington Post.

“The more energy and passion that council members feel — the politicians feel — from workers, the easier, the more comfortable they will be overturning the initiative,” said Mendelson, who later confirmed those remarks in an interview with The Post.

Mendelson accepted more than $30,000 from businesses and executives opposed to Initiative 77 for his reelection campaign this year, according to a new analysis by Public Citizen, the consumer advocacy group. More than half of that money appeared to come from a March fundraiser held by the restaurant association. It was part of $230,000 in contributions to the mayor and lawmakers during the last two election cycles that were made by restaurant owners and others opposed to Initiative 77, according to Public Citizen.

Mendelson told the private gathering that he plans to push emergency legislation to immediately kill the wage hike if he has nine votes by the council’s Oct. 2 meeting, according to the audio recording.

Workers on both sides of the issue weigh in on Initiative 77

In addition to Mendelson, six other lawmakers have backed repeal: Anita Bonds (D-At Large), Jack Evans (D-Ward 2), Brandon T. Todd (D-Ward 4), Kenyan R. McDuffie (D-Ward 5), Vincent C. Gray (D-Ward 7) and Trayon White Sr. (D-Ward 8).

Council members Robert C. White Jr. (D-At Large), Charles Allen (D-Ward 6) and David Grosso (I-At Large) have not taken public positions.

Council members Mary M. Cheh (D-Ward 3) and Elissa Silverman (I-At Large) oppose repeal, while Brianne K. Nadeau (D-Ward 1) said she was leaning against it.

Mayor Muriel E. Bowser (D) has opposed Initiative 77. Asked whether a ballot measure approved by voters should be repealed, Bowser’s office provided a statement saying the mayor stands “with the workers.” When asked which workers the mayor supports — since workers are split on the issue — her spokeswoman repeated the mayor “stands with the workers.”

Tipping the pay scales: What Initiative 77 means for Washington

The ballot measure is set to take effect around Oct. 9, when a congressional review period required for all District laws ends. The measure would immediately increase the tipped wage from $3.89 to $4.50. A separate attempt by House conservatives to void Initiative 77 failed.

Cheh, the only lawmaker to support Initiative 77 before the vote, is proposing an alternative to repeal. She wants to phase in the wage increase over 15 years instead of eight, giving businesses more time to adjust and future lawmakers a chance to intervene if the effects are negative.

“Maybe this compromise might work because then members don’t have to go against the vote, and they don’t have to overturn the initiative,” Cheh said. “There will be time to make sure this is a sensible thing to do.”

Restaurant Opportunities Centers United, the New York-based advocacy group for restaurant workers behind Initiative 77, is concerned that the measure will not survive in its current form and is endorsing Cheh’s plan.

Residents seethe as D.C. Council moves to overturn Initiative 77

“We are being flexible here,” said Diana Ramirez, who leads the D.C. chapter of Restaurant Opportunities Centers United. “We understand this is going to take both sides coming to the table to find a compromise that keeps intact the initiative — which is getting 100 percent of the wage for tipped workers — but also is a win for the restaurant industry.”

The restaurant industry does not see it that way.

“There’s no compromise. This needs to be a full repeal,” said Kathy Hollinger, who leads the Restaurant Association of Metropolitan Washington. “Extending it and stretching it out is not appealing to the majority of people in our market.”

Mendelson told The Post that Cheh’s proposal “is a bit like water torture. It just extends it by drip.”

Some opponents of repeal have dubbed it “black-voter suppression,” noting the largest support for Initiative 77 came from heavily African American Wards 5, 7 and 8. The lawmakers representing those three wards — McDuffie, Gray, and Trayon White Sr. — all support repeal.

A debate about democracy: Can elected officials block the will of voters?

Restaurant Opportunities Centers United has encountered similar problems when backing ballot initiatives to raise the tipped wage elsewhere.

Last year, state lawmakers in Maine overturned a tipped wage hike approved by voters in 2016.

In Michigan, Republican lawmakers found a novel way to block a tipped wage ballot measure before voters have a say.

They passed a law this month increasing the tipped wage, rendering the measure on November ballot moot. Then they plan to take up bills to undo the wage increase on a simple majority vote, rather than the three-fourths majority required to overturn ballot initiatives.