How much to tip after D.C. raised the minimum wage for tipped workers (2023)

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Last year, D.C. passed a ballot initiative that will gradually raise the minimum wage for tipped workers — and diners have been confused about how much to tip since.

As of May 1, the minimum wage for tipped employees increased from $5.35 to $6 per hour, but it will jump another $2 per hour on July 1. By July 2027, the District of Columbia will have just one minimum wage for both tipped and non-tipped employees, joining eight other states and territories, including California, Alaska, Nevada and Guam with single wage laws for hourly workers. The current minimum wage in D.C. is $16.10 per hour, but will increase to $17 per hour on July 1.

(Video) New effort looks to raise DC tipped workers' minimum wage

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Even before Initiative 82 began its gradual march toward one minimum wage, bar and restaurant owners had instituted service charges — to recognize the risks involved in hospitality work during the pandemic and to offset the loss of tips when indoor dining was prohibited or greatly limited. But the ballot measure has pushed more proprietors to add service charges to their checks — or to increase menu prices — to help cover higher payroll costs.

In March, the Office of the Attorney General of the District of Columbia sent letters and fliers to local businesses to provide guidance on how to inform the public about service charges. The attorney general said restaurants and bars must “clearly and prominently disclose fees” at the start of the ordering process, and they must accurately describe the reason for the fee. The office said it could seek refunds or assess fines for establishments that violate the law.

Ultimately, all of this complicates the business of paying a check at the end of the night. So, what are you supposed to do? Here is the latest guidance on tipping in the District.

1

How much to tip

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What to do: 20 percent is never wrong.

(Video) DC Voters to Decide on Minimum Wage for Tipped Workers | NBC4 Washington

Absent a service charge, diners should tip 20 percent. But this gets tricky fast.

Even with the passage of I-82, countless restaurants still take advantage of a tip credit: They pay servers less than the minimum wage (currently $6 an hour in D.C. before it rises to $8 an hour in July) and rely on customer tips to cover the difference. If tips and wages combined are not enough to cover the minimum wage, owners are legally required to make up the difference. When there’s no service charge, one might assume a restaurant is taking a tip credit.

But that’s not always the case.

Ana-Maria Jaramillo and Gus May, owners of La Tejana in Mount Pleasant, pay all their employees $17 per hour because each worker is considered equal in the company’s business model. But because La Tejana is a counter-service operation and because customers can wait as long as 45 minutes before they even reach the counter to order breakfast tacos, Jaramillo and May don’t feel comfortable instituting a service charge. They figure customers would balk. But the owners allow diners to tip, and most do: between 15 and 20 percent for about 95 percent of the transactions, Jaramillo said.

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They do so, Jaramillo suggested, because Washingtonians understand workers who earn the full minimum wage still don’t make enough to live comfortably in the District. The Massachusetts Institute of Technology estimates the living wage for one working adult with no children in D.C. is $22.15 per hour. On a busy Saturday, La Tejana’s employees can earn as much as $31 an hour, Jaramillo said.

“If I was already tipping 20 percent every single time I went, I don’t think that I would allow anything to get in the way of that, even if it was a new law,” Jaramillo said. “I think I would still continue to just put 20 percent because that’s what I had always been doing, and because I want the restaurant to survive and I believe in them.”

But for restaurants that still take a tip credit — your server can likely provide insights on the establishment’s policies — you are expected to tip. Servers rely on these tips to survive.

2

If there is a service charge

(Video) D.C. voters approve Initiative 77, raising minimum wage for tipped workers

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What to do: Figure out what it’s for.

Unlike tips, which legally belong to tipped workers, a service charge is money that proprietors can use any way they want. The D.C. attorney general has said service charges must not only be disclosed at the beginning of the ordering process, but restaurants must use the money for the purpose stated on the menu or via the server. What’s billed as a worker’s health fund, for example, can’t become a restaurant-owner vacation fund.

Chris Svetlik, co-owner of Hill East Burger, has instituted a service charge from the day it opened last fall. Since I-82 kicked in, though, Svetlik and Hill East Burger have painstakingly tried to explain how they distribute the cash: Half goes to the staff, both front and back of the house, and half goes to the business. Yet, that tells only part of the story, Svetlik said.

Hill East Burger pays its staff $10 to $15 per hour — more than the $6 per hour required for tipped workers in D.C. — but the burger joint guarantees an hourly wage of $25 to $30 per hour on every shift, even a slow Monday night. The business uses its half of the service charge to subsidize the increased base pay — and to help cover its share of health insurance for full-time employees.

Many customers are “appreciative of the transparency and of a policy that at least is exploring a new way to provide staff a high guaranteed wage and a more stable take-home pay night to night,” Svetlik said. Of course, some are not appreciative, as seen in comments in response to the burger shop’s added fees. Some are more confused than they were before Hill East’s explanation. Some feel gaslighted. Some wonder why the shop doesn’t just raise prices.

I do think that a lot of the folks who are saying ‘just raise prices,’ if we did raise prices and the burger was $18 and fries are $8, they would be complaining,” Svetlik said. “The costs have to come from somewhere.”

Transparency is key. The owners contacted for this story say they welcome questions — and scrutiny — from the public. Be cautious with businesses that are vague about their service charges.

3

If the service charge goes entirely to restaurant employees

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What to do: It’s okay not to tip.

Some restaurants make it easy: They give every penny of the service charge to employees. Patrice Cleary, owner of Purple Patch in Mount Pleasant, puts a 20 percent service charge on “each check for dine in and patio that is shared with all staff working that day,” as noted on the menu.

Part of the fee is held for the kitchen staff, which receives a bonus each quarter based on the hours they worked during the period, Cleary said. The rest goes to the front-of-the-house staff, which gets paid its share of the tips twice a week. This money is on top of the $17 an hour, or more, that Cleary pays employees.

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(Video) Breaking News: Washington, DC Raises the Minimum Wage For Tipped Workers

In other words, Cleary has nearly three times the labor costs compared to owners who rely on customer tips to help cover their payroll. Yet she doesn’t use the service charge to cover her increased costs. She takes the hit herself, annually shifting hundreds of thousands of dollars that would normally go to the restaurant and allocating it to the staff. She started this model during the pandemic and just continued it.

“I don’t see it as a pay cut. I see it as an investment,” Cleary said. “I want them to know that I wouldn’t have my restaurant without them. So how do I do that? These kids make a lot of money, but I’m happy they’re making a lot of money. They’re happy coming to work because they know they’re not relying on somebody leaving them a tip.”

Purple Patch still has a tip line on its checks, and that money all goes to the staff, too. About 50 percent of the customers add another 5 to 10 percent to their bill, Cleary said, though it’s not expected.

“Absolutely not,” Cleary said. “None of my staff expects it, either.”

4

If you can’t figure out what the service charge is for

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What to do: See No. 1

Wage theft is a problem in the restaurant industry, even during the pandemic when the balance of power seemed to shift to workers. This isn’t just exploitation — it’s illegal, and the attorney general has a tip line to report such practices.

The industry’s history of wage theft — combined with the current trend toward service charges — has made the public even more wary about where the money from added fees goes. The restaurant is supposed to be clear about how the money is used, but maybe the menu language is too vague. Or maybe the server is too busy to give you a precise breakdown of the service charge. Or maybe, like Cleary with Purple Patch, you don’t want to go to a restaurant to conduct an investigation.

“I don’t want to be digging into somebody else’s business,” Cleary said. “I think there should be a little bit more transparency.”

(Video) Initiative 82 passes: D.C. tipped workers to be paid minimum wage | FOX 5 DC

For whatever reason, if you cannot figure out what a service charge is for, you should default to tipping as you usually would in the absence of an added fee. After all, overtipping is not a crime, and those tips are the legal property of the workers, not the owners.

FAQs

What is the minimum wage for tipped employees in DC 2023? ›

Beginning July 1, 2023, the minimum wage in the District of Columbia will increase from $16.10 per hour to $17.00 per hour for all workers, regardless of the size of the employer. Beginning May 1, 2023, the base minimum wage for tipped employees will increase from $5.35 per hour to $6.00. Need to file a claim?

What is the tip credit for DC minimum wage? ›

In November 2022, D.C. voters passed Initiative 82, the District of Columbia Tip Credit Elimination Act of 2021, which phases out the tipped minimum wage over approximately four and a half years. Currently, D.C. minimum wage is $16.10 per hour.

What is the standard tip in DC? ›

In most restaurants, tip the waiter 16%–20%. (To figure the amount quickly, just double the sales tax noted on the check—it's 10% of your bill.) Tip at least $1 per drink at the bar and $1 for each coat checked.

Is gratuity mandatory in DC? ›

This gratuity is otherwise known as the “tip credit.” Beginning on May 1, 2023, employers are required to supplement workers' pay if the worker did not earn enough in tips to reach the DC minimum wage.

What is Colorado minimum wage 2023 tip? ›

(1) Employers can't pay more than $3.02 below full minimum wage, no matter how high tips are. In 2023, that requires at least $10.63 ($14.27 in Denver) in direct wages, even if tips are (for example) $20 per hour.

What state has the highest tipped minimum wage? ›

Hawaii, which has the highest-paid waiters and waitresses in the country (mean wage: $17.84/hour) has a minimum wage of $8.50 for tipped employees. In the state of Alaska, California, Minnesota, Montana, Nevada, Oregon, Washington, same minimum wage are applied for both tipped and non-tipped employees.

How much do tipped employees make in DC? ›

Minimum Wages for Tipped Employees
JurisdictionBasic Combined Cash & Tip Minimum Wage RateMaximum Tip Credit Against Minimum Wage
Delaware$11.75$9.52
District of Columbia15$16.10$10.10
Florida 17$11.00$3.02
Hawaii*$12.00$1.00
66 more rows

What is the overtime rate for tipped employees in DC? ›

The absolute minimum rate an employer may pay an employee who earns gratuities is $4.45 per hour. The overtime rate is half of the full minimum wage plus the employee's regular rate of pay.

How much tips in Washington DC? ›

Tipping in Washington DC

Generally, 15-20% of the bill total is a good figure to aim for when knowing how much to tip, or the restaurant may helpfully suggest an amount. It's a good idea to keep a collection of $1 bills handy for this purpose alone.

Is 15% tip reasonable? ›

15% is appropriate for average service ; 20% if your server is above average. You should feel free to tip above 20% if you received excellent service. If you received poor service, it is better to talk to the manager than skip on the tip. Leaving no tip does not correct the problem of poor service.

Is 10% tip standard? ›

Even if the service is poor, it's recommended you leave at least 10 percent.* Check your tab carefully because some places add a gratuity to the bill. You may or may not want to supplement that. For the wait staff at sit-down restaurants, the tip should be 15 percent to 20 percent of the pretax bill.

Is 15% tip fair? ›

And while there are no set rules for tipping, a gratuity of about 15 to 20 percent is generally expected, according to the etiquette experts at The Emily Post Institute. That range is supported by a CreditCards.com survey that pegs the median tip in the U.S. at 18 percent.

Can you decline to pay gratuity? ›

The customer can't be required to pay it. The customer gets to determine the amount. It's not the result of negotiations or decided by policy. The customer determines who (usually the server) gets to receive the payment.

Can you refuse to pay gratuities? ›

You have the right to refuse this automatic gratuity charge and may compensate cruise staff on your own terms. However, you will need to notify the front desk of this desire. Otherwise it will appear on your bill when your cruise ends and it will be charged to your credit card on file.

Is service charge a tip in DC? ›

For diners, the first and most obvious change will be service charges. Everywhere. Unlike regular tips, these fees are not legally required to go to service staff; owners can use that money however they want. “Everybody has to do a service charge,” says Ashok Bajaj, whose restaurants include Rasika and Annabelle.

What is a livable wage in Colorado? ›

Living Wage Calculation for Denver County, Colorado
1 ADULT2 ADULTS (BOTH WORKING)
0 Children1 Child
Living Wage$20.25$23.11
Poverty Wage$6.53$5.54
Minimum Wage$13.65$13.65

How much does a waitress make an hour without tips in Colorado? ›

If an employee's tips combined with the employer's cash wage of at least $10.63 per hour do not equal the minimum hourly wage of $13.65 per hour, the employer must make up the difference in cash wages.

What is Colorado tipped minimum wage? ›

(KKTV) - In the New Year, Colorado's minimum wage will increase from $12.56 per hour to $13.65 per hour. Colorado Gov. Jared Polis also signed a law allowing local governments to set a higher minimum wage if they see fit. Minimum wage for tipped employees at the sate level will increase to $10.63 in 2023.

What state has the most generous tippers? ›

Here's how all the states stacked up against each other, from the highest average tip to the lowest.
  • Texas: 18.9%
  • Louisiana: 18.8%
  • New York: 18.7%
  • Hawaii: 18.7%
  • Nevada: 18.4%
  • Florida: 18.3%
  • Washington: 18.2%
  • California: 17.5%
Mar 7, 2023

Do tips get taxed? ›

All cash and non-cash tips an received by an employee are income and are subject to Federal income taxes. All cash tips received by an employee in any calendar month are subject to social security and Medicare taxes and must be reported to the employer.

Which US states tip the most? ›

The U.S. States That Tip the Most and the Least

Diners in New Hampshire and Ohio are the most generous with over 19% of tippers in each state tipping 25% or higher after eating a well-cooked meal. The South, most famous for its hospitality and manners, shows it in tips.

Can managers take tips in DC? ›

Employers, Including Managers and Supervisors, May Not “Keep” Tips: Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees' tips for any purpose, whether directly or through a tip pool.

What is the highest tipping job? ›

The top three best tipped jobs are waiter/host, nanny, and delivery driver. Most of these jobs require great customer service skills and communication skills. Tipped jobs are a great way to make a little extra income with minimal job training required.

What's the average salary in DC? ›

This is equivalent of $1,508 a week or $6,537 a month. Most salaries in Washington range between $62,678 (25th percentile) to $93,274 (75th percentile) annually. Of course, salaries will vary depending on your occupation, experience, and many other factors.

What states have eliminated tipped minimum wage? ›

D.C. joins seven other states that have eliminated the lower minimum wage for tipped employees – including Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington State.

How is tipped payroll calculated? ›

Calculate average tips per hour

To calculate average tips, divide the total tip amount by the number of hours worked in the pay period. If your business pools tips, the entire tip amount is the employee's share of tips.

How do you calculate gross pay for tipped employees? ›

The regular rate of pay for a tipped employee is the amount of direct cash wages paid plus the tip credit amount claimed by the employer (plus other additional pay not statutorily excluded).

How much do you tip a doorman in DC? ›

Doorman, concierge: $50 to $150. Porter, handyman, and other maintenance staff: $20 to $30.

Is it OK to tip $1? ›

At most restaurants, tipping on a percentage of the total bill remains de rigueur. But at bars, a $1-per-drink gratuity has remained the standard, even amid ballooning inflation and the ever-rising cost of living.

How much do you tip a taxi in DC? ›

Tipping Drivers in DC

For taxi drivers, expect to tip 15%. If they help you with your large luggage or are especially friendly, go up to 20%; the same goes for Uber and Lyft.

Is 8% a bad tip? ›

20% is the REAL standard for tips

Industry insider: common consensus says 15-20% is considered a normal tip, but honestly any amount less than 20% is considered a bad tip. If I (or the other servers I worked with) got less, we wondered what we did wrong.

Is it rude to not tip for takeout? ›

So, Should I Tip for Takeout? Yes, you should tip the waitstaff for your takeout order—if the restaurant is a traditional dine-in establishment where servers wait on tables. “An appropriate amount to tip on takeout orders would be approximately 10% to 12%,” says Kane.

How much should you tip on a $200 bill? ›

If your total bill is $200 and you want to tip 15%, work out the tip by multiplying the total bill by 0.15. You can then add this amount to your bill when it comes to pay. Simple. Or alternatively, you can multiply the bill excluding service by 1.15 (assuming you want to leave that same 15% tip).

Do you tip 20 at expensive restaurants? ›

According to Best Life, 18% is the tipping standard for fancy restaurants; anything less than 15% is unacceptable. A 20% tip, it says, is a good way to acknowledge exceptional service.

When should you not tip? ›

If you get sick, the server becomes physically aggressive with you, or you see something completely unsanitary affect your food, by all means let the management know and likely, you may not need to pay for any of the experience at all. If you are forced to pay, then, you can decide not to tip on that same day.

Do you tip before or after tax? ›

Even though a tip should depend on the quality of the goods or services received, it is customary in the United States to leave a tip equivalent to 15% of the total bill, before taxes, in restaurants and bars. You can leave the tip on the table or give it directly to your waiter/waitress.

Is 7% tip bad? ›

The average tip for perfect service in the U.S. is 20 percent. However, that number can fall as low as 6 percent for bad service. Tipping averages also vary based on the gender of the customer, the region of the country, and the specific services provided (or not provided).

How much do you tip a hairdresser on $400? ›

Remember the golden rule: "You should tip 20 percent on the entire service cost, not per individual," says Schweitzer. So if your haircut and blow-dry cost $40 total, and your color was $60, your total service cost comes to $100. That means you should tip $20 divided between the colorist and stylist.

Is a $5 dollar tip good? ›

"Three to five dollars is a sufficient tip," Swann says. "It doesn't necessarily need to be a percentage of the food you ordered."

Can cruise lines force you to pay gratuities? ›

Technically cruise lines cannot force you to pay gratuities, especially if you have a complaint or issue about the service you received on board. Gratuities on a cruise are not mandatory, but instead heavily suggested and added automatically.

What is the difference between a tip and a gratuity? ›

What Distinguishes a Gratuity from a Tip? A Tip Is a Gift – A Gratuity Is a Fee There are some critical differences between a tip and a gratuity. The first is that a tip is a gift, while a gratuity is a fee. This is significant because it means that you can't use a tip as an excuse to pay your employees less.

What is illegal gratuity? ›

Illegal gratuities are similar to bribery, except that there is no intent to influence a particular business decision, but rather to reward someone for making a favorable decision.

Is gratuities corruption? ›

Gratuities are often seen as the first step on the slippery slope toward major corruption (Coleman, 2004), and it is for this reason that accepting gratuities is always frowned upon by law enforcement agencies.

Why can't officers accept gratuities? ›

When gratuities draw officers to spend more time with persons and businesses that offer gratuities, they risk violating the ethic of democratic policing. This should be the rationale for training officers not to accept gratuities.

Do cruise workers get their tips? ›

Bartenders, main show entertainers and third-party shop employees are some of the more obvious ones, but they're not the only ones. Most cruise ship employees that do not receive gratuities receive a salary instead. For example, a cruise ship captain won't receive tips, but they will receive a healthy salary.

What is tip credit in DC? ›

During the November 2022 elections, the D.C. Council passed the Tip Credit Elimination Act. Under previous District law, employers of tipped workers were permitted to take a credit against tipped wages received by workers to satisfy the minimum wage guaranteed to all workers under the law.

Should I tip if there is a service fee? ›

Yes, You Should Still Tip 20% on Top of a Restaurant's Service Charge. From dine-in fees to service charges, here's everything to know about the extra fees showing up on restaurant checks these days.

What will DC locality pay be in 2023? ›

Download PDF The 2023 Locality Adjustment Rate for the Washington DC GS locality is 32.49%. This is the 2023 locality-adjusted GS pay table for Washington DC-area workers.

What will the US minimum wage be in 2023? ›

The minimum wage is scheduled to increase to $9.50 per hour on July 1, 2023.

What is the federal pay raise for 2023 DC locality? ›

For 2023, the base pay raise is 4.1%. The locality pay raise is more complicated. On top of the 4.1% that everyone gets in 2023, there's an additional 0.5% bump, totaling to a 4.6% federal pay raise overall.

What 23 states are raising minimum wage in 2023? ›

Which States are Increasing the Minimum Wage in 2023?
  • Alaska.
  • Arizona.
  • California (all)
  • Colorado.
  • Connecticut.
  • Delaware.
  • Florida.
  • Illinois.
Jan 1, 2023

What is the federal pay update for 2023? ›

The 2023 federal pay raise, enacted in January, was 4.6% on average, composed of a 4.1% base pay raise and a 0.5% average locality pay bump.

What is the federal pay increase for 2024? ›

This year's bill suggested an 8.7% salary increase for 2024. Following the FAIR Act, the White House will make a (lower) suggestion in its recommended budget, which gets published during the spring. This March, the Biden Administration suggested a 5.2% raise.

What is the pay increase for 2024? ›

Biden is proposing a 5.2% pay raise for federal employees in fiscal 2024.

What is federal minimum wage July 2023? ›

Due to the enactment of Senate Bill (SB) 3, the California minimum wage increased to $15.50 per hour, effective January 1, 2023, for all employers. As a result, a number of regional center vendors may be eligible for a rate adjustment in order to pay employees the new minimum wage.

What will minimum wage be in 2024? ›

The federal minimum wage is just $7.25 and has not increased since 2009. The Raise the Wage Act of 2019 would gradually raise the federal minimum wage to $15 an hour by 2024.

What is the average hourly wage in the US 2023? ›

In May 2023, the average hourly earnings of all employees in the United States was at 11.03 U.S. dollars. The data have been seasonally adjusted.

Will DC government employees get a raise in 2023? ›

For instance, General Schedule employees working in the Baltimore/Washington, D.C. metropolitan area will get a total raise of 4.86%, while employees in the Atlanta/Athens, Georgia, pay locality area will receive a pay increase of 4.43% in 2023.

How much is a $2,500 raise? ›

If an employee's current annual salary is $50,000, and he earns a $2,500 raise, then the annual salary will increase to $52,500.

Will federal employees get a COLA increase in 2023? ›

For example, the 2023 COLA was 8.7% — the highest percentage increase since 1982. But FERS retirees saw only a 7.7% COLA. Cost-of-living adjustments are designed to keep federal and military retirees and Social Security recipients, on par with inflation.

What is the highest minimum wage in the US? ›

The state with the highest minimum wage isn't California or New York—and it pays more than $15/hour
  • Washington: $15.74. Living wage: $19.58.
  • California: $15.50. Living wage: $21.24.
  • Massachusetts: $15. Living wage: $21.35.
  • New York: $14.20. Living wage: $21.46.
  • New Jersey: $14.13. Living wage: $18.71.
Apr 14, 2023

What state has lowest minimum wage? ›

Which state has the lowest minimum wage? Georgia and Wyoming's hourly minimum wage are tied at $5.15. However, employers covered by the FLSA must adhere to the federal requirement of $7.25.

Does raising the minimum wage increase the cost of living? ›

No, the federal minimum wage is not tethered to inflation. The annual minimum wage set by the federal government does not chang each year in response to change in prices.

Videos

1. Tipped Wage 101
(EPIOnline)
2. Tipped-worker wages increase in DC, will menu prices follow?
(DC News Now)
3. DC leaders could reject vote to pay tipped workers minimum wage
(WUSA9)
4. Is It Time for Tipped Workers to Receive the Full Minimum Wage?
(Economic Policy Institute)
5. State Looking To Reduce Minimum Wage For Tipped Workers
(WESH 2 News)
6. How would eliminating the tip credit impact local restaurants?
(WIVBTV)

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