D.C. Tipped Worker Warns New York, Other States Against Tip Credit Elimination

It’s no secret tip credit elimination has already wreaked havoc on the nation’s capital: employment is down in full-service restaurants, tips are disappearing, and restaurants are looking for ways to move out or change their operations.

Yet the same activists are looking to bring the same bad policy around the country, now setting sights on New York, which has two bills proposing tip credit elimination in the Empire State.

This week in the Syracuse Post-Standard, long-time D.C. tipped employee Valerie Torres details the crisis for servers and bartenders, and why New York should steer clear:

In just a year of D.C. moving toward tip credit elimination, our industry has been completely ravaged.

First, restaurants scrambled to add service charges to offset the rising costs — locals on Reddit count over 250 city restaurants are using them. As a result, confused customers are leaving fewer tips under the assumption that the full service charge will go to their server or bartender.In reality, service charges aren’t required to go to workers the same way that tips are. Tips are legally protected as the property of the employee, but service charges count as restaurant sales, get taxed, and then are up to the restaurant to distribute.

Since the rise of service charges, customers in D.C. are tipping less, and tipped workers like me are feeling it.Now, more and more restaurants are finding they can’t maintain the same staff in their D.C. locations anymore. The data speaks for itself: Local restaurant employment has already fallen by 4 percent since Initiative 82 went into effect in May 2023.

Tipped workers aren’t the only ones suffering. “Back of the house” employees — such as line cooks, dishwashers and maintenance staff — have been the first to face job cuts and have had fewer opportunities for salary increases.

Read the full post at Syracuse.com.