Advocacy Group Offers Guide to Dining Service Charges

By James Wright WI Staff Writer

The District’s arm of One Fair Wage, an advocacy group calling for fair wages for hourly and tipped workers, has published a guide with the support of other organizations informing consumers on which restaurants are using service charges. This effort is in concert with the passage of Initiative 82 by District voters in 2022, which progressively allows tipped workers to get the city’s minimum wage in a few years. Service charges are fees added to a customer’s restaurant bill, usually involuntarily. Depending on the restaurant, fees will be explained, what purpose they serve and for what they are used.

“D.C.’s Consumer Guide to I-82 and Service Charges” is presented on the One Fair Wage website. It compiles the response of 150 restaurants in the city that utilize service charges.

The guide has been published in reference to November 2022, when District voters passed Initiative 82 (I-82) by 74% of the vote. I-82 was designed to increase the minimum wage for tipped employees from $5.05 an hour to match the minimum wage of non-tipped employees in 2027. As of July 1, 2021, the minimum wage for non-tipped workers was $15.20.

The increase in the minimum wage progresses. It began this year, on January 1, with $6 per hour and

5 will increase to $8 per hour by July 1; $10 per hour by July 1, 2024; $12 per hour by July 1, 2025; $14 per hour by July 1, 2026; and equal to non-tipped employee minimum wage by July 1, 2027. I-82 was supposed to go into effect in January. However, the D.C. Council postponed implementation to May 1.

In 2018, District voters passed a similar initiative, but the council set it aside.

Saru Jayarman, the president of One Fair Wage, said after the council delayed implementation of I-82, the city’s interest group for restaurants set in motion a plan.

“The Metropolitan Association of Metropolitan Washington advised restaurants to switch from tips to service charges,” Jayarman said.

Jayarman said that service charges can be a good thing.

“Service charges can be used to get rid of racial practices in which servers sometimes don’t receive tips for their service because of their color,” she said. “The server would get a set gratuity. The service charges go to the employer. The employer is supposed to give it to the employee but that is not happening in many cases.”

Instead, Jayarman said the service charges are used by restaurant managers to cover operational costs in many instances. However, she said

150 restaurants in the guide reveal the full usage of the service charge on their website.

D.C. Council member Janeese Lewis George (D-Ward 4) said it is important for restaurants to “honor language and spirit of I-82.” Noting that family members worked as servers in the city, she said “Black and Brown women are the backbone of the restaurant industry.”

George said she will support the full implementation of I-82 despite council bills that would exempt restaurants from D.C. consumer law and postpone, again, the implementation of the measure.

Adam Teitelbaum, who works in the Office of Consumer Protection for the D.C. Attorney General, said restaurants have the right to impose a service charge fee under District consumer law.

“But you should know about that before you order,” Teitelbaum said. “And it must be prominent for the diner to see. The disclosure should be clear and accurate on why the fee is being charged and for what it is being used.”

Teitelbaum said there are plans for his office to educate restaurant owners on the particulars of the D.C. consumer law and how it applies to them.

WI @JamesWrightJr10