News You Can Use I: DC Council Votes to Preserve Tip Credit with New Phase-In Plan

After months of heated debate and testimony, the DC Council has officially voted to preserve the tip credit, marking a major shift from the trajectory originally set by Initiative 82, which would have fully eliminated the tip credit by 2027. Instead, a new 9-year phase-in plan has been approved, gradually raising the tipped wage until it reaches 75% of the minimum wage by 2034. For now, the tipped wage will remain at $10/hour and isn’t expected to exceed $11 until at least 2029.

Here’s what’s changing:

New Wage Timeline: Starting in 2026, the tipped wage will move up in small increments every one to two years, landing at 75% of the full minimum wage by 2034.

Pay Stub Transparency: Restaurants will be required to itemize tipped wages, tips, bonuses, and commissions on employee pay stubs.

Biennial Industry Review: A new report on the health of DC’s restaurant industry will be published every two years by the city’s Chief Financial Officer.

The vote passed 7–5, with Councilmembers Charles Allen and Christina Henderson leading the proposal. Notably, Council Chair Phil Mendelson and Councilmembers Anita Bonds, Kenyan McDuffie, Brooke Pinto, and Wendell Felder voted in favor, while Robert White, Brianne Nadeau, Matt Frumin, Zachary Parker, and Janeese Lewis George opposed the plan. Supporters of the new plan say it offers a more stable path forward for an industry still reeling from pandemic fallout, inflation, and widespread closures. Opponents remain concerned about long-term wage equity and protections for tipped workers.

What’s next? RAMW (Restaurant Association of Metropolitan Washington) has said it will share more detailed guidance for restaurants on navigating the updated wage schedule and compliance requirements.

For now, the vote represents a moment of breathing room for many in the hospitality industry and more changes may still be on the horizon.