DC’s New Restaurant Pay Rules Are Already Changing Dining

DC’s dining scene is on the brink of becoming an expensive, soulless wasteland—or, you know, a bastion of fair pay where workers and restaurants thrive. District voters overwhelmingly passed Initiative 82 in November, and as a result, restaurants will start phasing out the current “tip credit” system, which lets businesses pay as little as $5.35 an hour and use gratuities to make up the rest of the minimum wage.

So what happens now? The forecasts are largely one extreme or the other. One side predicts that increased labor costs will force restaurateurs to raise prices, cut staff, or close altogether—while tipped workers flee for the burbs or leave the business. The other side sees a future in which DC eateries continue to flourish and tipped employees—less dependent on the whims and biases of strangers—finally have some economic stability and face less discrimination and harassment.

Whose crystal ball is clearer may take years to determine. After all, the move to a universal minimum wage will happen incrementally over five years. 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. “Everything is going to be looked at—some pricing, some service charge, some cutting back on the hours.”

Service fees started cropping up during the pandemic—some in anticipation of law changes. The Van Ness bakery Bread Furst added a 9.5-percent service charge shortly after the election and is using the funds to boost base wages of everyone from cooks to cashiers even before the initiative goes into effect. “Somewhere in this realm is the future,” says general manager Scott Auslander. “And if we’re going to start taking care of people better, which is the intention, then what are we waiting five years for?”

As much as diners might complain about the bill add-ons, restaurateurs believe service fees are less of a turnoff than price hikes. “It’s an easier pill to swallow,” says Adam Stein, chef and owner of the Eleanor in NoMa. He believes the upfront sticker shock of a pricier menu would be “more jarring than someone going, ‘Okay, I don’t have to worry about the tip—it’s already included.’ ” That’s not to say tipping is on the way out. Most restaurants with service charges keep a tipping option, making expectations for diners that much more confusing: Do you leave extra on top? How much?

Restaurateurs could also decrease the number of staffers they employ due to the added wage costs, perhaps even replacing human servers with QR-code ordering or other automated systems. “That’s not something I ever would have considered doing before,” says Hank’s Oyster Bar owner Jamie Leeds.

Then there’s the question of whether Initiative 82 will inflict larger damage on the dining scene over time. Some observers think restaurateurs will refocus on the suburbs. Leeds says the new rules mean she won’t open more restaurants in the District: “The margins are so small as it is, and this is going to cut into that.”

But don’t freak out yet: DC will likely remain the epicenter of the region’s dining scene. However bumpy things get in the short term, it’s hard to imagine restaurateurs totally giving up on the city. “So many things have changed over the years with costs and regulations,” Stein says. “We’ve had to adapt so many times. We’ll figure it out.”

This article appears in the January 2023 issue of Washingtonian.

Jessica Sidman

Food Editor

Jessica Sidman covers the people and trends behind D.C.’s food and drink scene. Before joining Washingtonian in July 2016, she was Food Editor and Young & Hungry columnist at Washington City Paper. She is a Colorado native and University of Pennsylvania grad.