2 in 5 D.C. Restaurants May Close in 2025, Survey Says

A new survey from the Restaurant Association Metropolitan Washington (RAMW) of local D.C. restaurants shows businesses are preparing for a bumpy year as the road to tip credit elimination continues under Initiative 82. On July 1, local restaurant operators will see another tipped wage hike – from $10 to $12 per hour.

The RAMW report shows the broad negative effects of D.C.’s tip credit policy on local restaurants:

  • 44% of DC’s full-service casual restaurants say they are likely to close in 2025;
  • Nearly half (49%) of all restaurants saw fewer diners in 2024 than the previous year (up 20%), while those experiencing lower sales jumped to 47% (up 52%);
  • Diners are increasingly staying home due to rising prices, with 47% of DC residents saying they’re dining out less frequently; and
  • Following a year of steady full-service restaurant job losses and tipped workers earning less (79%) and clocking fewer hours (56%), nearly 9 in 10 (85%) of DC full-service casual restaurants and almost two-thirds of other segments anticipate further cuts in 2025.

The report also features a snapshot of how tipped workers are faring in D.C.:

  • Earnings are declining across the board, with 79% earning less in tips and 56% working fewer hours in 2024 than the previous year;
  • 71% of tipped workers said they or someone they knew has had hours reduced;
  • 54% said they or someone they know has been laid off;
  • 78% have seen reduced customer traffic affect tips; and
  • 78% have experienced increasing customer resistance to higher prices, and 72% have seen higher menu prices negatively affecting tips.

The survey confirms what EPI, servers, and bartenders, have been warning of since the proposal and passage of Initiative 82–which eliminated the tip credit in the District.

Data shows the passage of Initiative 82 gutted the restaurant industry, causing as many as 4,000 workers to lose their jobs, and 70 percent of restaurants to cut worker hours or stop hiring altogether.

DC has already racked up several high-profile restaurant closures in 2025:

Additionally, a January hearing before the DC City Council saw dozens of servers and bartenders testify against the law, with some saying:

  • “Since Initiative 82  has begun to be implemented…I’m now making up to 50% less….for the first time in my adult career at 41 years old…I don’t know what my future looks like.”  – Laura Pacholkiw, Bartender
  • “I can go to Maryland and make at least $200, oven $300 or more, for five hours of work, or work double those hours and only make $150 in DC.” – Rachel Giordano
  • “Here we are now suffering the consequences … my working hours were cut by 5-10 hours per week and service charges decreased my average tip percentage from 23-25% to 18-20%.” – Yana Tarakanova, Server