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District of Columbia’s Pause on Tipped Wage Increase Signals Grim Future for Initiative 82

By Victoria L. Vish and Ryan T. Sears
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In November 2022, voters in Washington, D.C., approved Initiative 82, the “District of Columbia Tip Credit Elimination Act of 2022,” which set forth a gradual elimination of the use of the tip credit in the District by 2027. In doing so, the District’s minimum cash wage (i.e., the subminimum wage paid by the employer when an employer utilizes a tip credit) has been increasing by a dollar or two every year since 2023, and the corresponding maximum tip credit an employer can take in the District has been reduced.

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Quick Hits

  • On June 30, 2025, District of Columbia Mayor Bowser signed emergency legislation that pauses the scheduled tipped wage increase from $10 to $12 per hour on July 1, 2025.
  • On July 1, 2025, the permissible tip credit in the District of Columbia increases from $7.50 to $7.95.
  • The emergency legislation expires on September 28, 2025.

Under Initiative 82, the next increase to the minimum cash wage for tipped employees in the District was scheduled to increase from $10 per hour to $12 per hour, effective July 1, 2025. However, on June 3, 2025, at the urging of Mayor Muriel Bowser to repeal Initiative 82, the Council of the District of Columbia voted in favor of emergency legislation to pause this increase and approved a resolution cited as the “Tipped Minimum Wage Increase Clarification Declaration Resolution of 2025.” Mayor Bowser signed the emergency legislation to amend the Minimum Wage Act Revision Act of 1992 (D.C. Act 26-94) on June 30, 2025, which officially paused the scheduled tipped wage increase under Initiative 82.

On July 1, 2025, the hourly minimum wage in the District of Columbia still increases to $17.95. Therefore, as a result of the emergency legislation, the District’s permissible tip credit increases from $7.50 to $7.95 on July 1, 2025. The emergency legislation remains in effect for ninety days and expires on September 28, 2025.

The emergency legislation is consistent with Mayor Bowser’s announcement that her fiscal year 2026 budget proposal will include repealing Initiative 82. While Initiative 82 remains intact for now, all signs point toward a likely grim future for Initiative 82, particularly since measures limiting the federal taxation of tips are in a federal budget reconciliation bill (the “One Big Beautiful Bill”) currently under consideration by the U.S. Congress, but whether that means a modification or repeal remains to be seen.

Ogletree Deakins’ Washington, D.C., office and Wage and Hour Practice Group will continue to monitor developments and will post updates on the District of Columbia and Wage and Hour blogs as additional information becomes available.

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