WASHINGTON (DC News Now)—As restaurants grapple with the impacts of Initiative 82, advocates of the initiative are raising concerns about the transparency of service charges intended to cover the cost.
Initiative 82 passed on the ballot in November and went into effect in May. The measure phases out the tipped wage and implements a minimum wage for workers, including servers and bartenders at restaurants. Advocates of Initiative 82 said the intention is to pay restaurant workers a living wage, while also paying them tips.
However, restaurant owners have raised concerns about the cost of paying staff a full minimum wage.
Geoff Tracey, owner of Chef Geoff’s, told DC News Now’s Dave Leval that he’d begin charging a service fee on each check to cover the cost.
“Eventually people are going to be paying $25 for a hamburger in a full-service restaurant. It’s going to be the norm in Washington, D.C,” said Tracey during the April interview.
Tracey isn’t alone in this decision.
Still, advocates of Initiative 82 worry about the implications of the added service charge.
“Service charges are different than tips in that they’re automatic gratuities that are the property of restaurant ownership,” said Saru Jayaraman, President of One Fair Wage, which is behind Issue 82.
Jayaraman said in other cities, many restaurants are adding a service charge to replace tipping. But, she said they are still paying their workers a full minimum wage.
She said that isn’t happening in D.C.
“It’s been different in D.C. because, after the passage of Initiative 82, the Restaurant Association of Metropolitan Washington held a series of meetings with restaurants encouraging them to switch from tips to service charges and use a portion of the service charge to cover the wage increase,” said Jayaraman.
That means workers would not be getting the full pay intended by One Fair Wage, which would be a full minimum wage plus gratuity.
DC News Now reached out to the Restaurant Association of Metropolitan Washington for comment, but no one was immediately available for comment Tuesday night.
Jayaraman also claimed restaurants aren’t being transparent with how the service charge is being used.
“Only 9 percent of nearly 150 restaurants we sampled were disclosing how they’re using the service charges as they’re required by DC consumer law,” she said.
“I’ve actually noticed it at a couple of restaurants recently, that they’re adding 20 percent on top of the bill,” said Annissa Desilva, who eats out once or twice a week.
Desilva said she doesn’t mind the added service charge, although she does not tip on top of it. But, she said the charge does raise some questions.
“I am just curious about how it’s split,” she said. “Is it split with the bus boys and everyone in the back kitchen? Is it just for our waiter?”
“I did notice it once, and there was a bit of confusion,” said David Ballen.
Ballen said it was unclear how much to tip, if any on top of the service charge.