February 2023: DC Delays Tip Credit Phase-Out

15 Feb


Update Applicable to:
All employers in the District of Columbia (Washington D.C)

What happened?
On January 26, 2023, Mayor Bowser signed emergency legislation D.C Act 25-23, which delayed the implementation of its tip credit phase-out to May 1, 2023.

What are the details?
The minimum base wage for tipped employees remains $5.35 per hour through April 30, 2023.

The minimum base wage under the revised tip credit phase-out schedule is as follows: 

  • May 1, 2023: $6 per hour 
  • July 1, 2023: $8 per hour 
  • July 1, 2024: $10 per hour 
  • July 1, 2025: $12 per hour 
  • July 1, 2026: $14 per hour 
  • July 1, 2027: same as the regular minimum wage (employers can’t take a tip credit) 

Why This Happened?
Voters in DC passed Initiative 82 in November’s election to phase out the tip credit, beginning on January 1, 2023, by increasing the minimum base wage for tipped employees to $6 per hour. Given DC’s status as not a state, its laws are generally subject to Congressional review.  

However, the Congressional House didn’t elect a speaker for an extended period, causing a delay in reviewing DC’s new laws. In response, DC enacted emergency legislation to change the date of the increase in the base minimum wage for tipped workers to May 1, 2023.

For more information, please see the links below:

D.C Act 25-23



What do employers need to do?
Employers should review the links provided above and adjust their payroll to comply with the law.

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