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D.C. Creates New Training And Reporting Obligations For Employers With Tipped Employees

You may recall that earlier this year, voters in the District of Columbia passed an initiative (Initiative 77) that would have increased the minimum wage for tipped employees (who predominantly work in the restaurant, hotel, and retail service industries) incrementally up to $15.00 an hour by 2025.

Recently, however, the D.C. Council changed course by passing the Tipped Wage Workers Fairness Amendment Act of 2018 (the “Act”).  Most directly, the Act repeals the voter initiative and keeps the tipped minimum wage where it previously stood.  Employers must pay their tipped employees at least $3.89 an hour as of July 1, 2018; $4.45 an hour beginning on July 1, 2019; and $5.00 an hour starting July 1, 2020.

The Act also authorizes the creation of:

  • a website with a centralized database of pertinent employment laws and related posters that covered employers may use;
  • a mayoral public-education campaign about local wage and hour laws; and
  • a public “tip line” for individuals (including non-employees) to notify the government of alleged wage and hour violations.

In addition, the Act imposes new training and reporting obligations on employers with one or more tipped employees who work in the District.  Specifically, the Act requires:

  • Sexual harassment training. Once the D.C. Office of Human Rights (OHR) creates a sexual harassment training course, all employees (not just tipped employees) and owners or operators of covered employers must attend that training within 90 days of hire and at least once every 2 years after.  Within 30 days of attending such training, employers must provide certification to OHR that the training was completed.
  • Annual sexual harassment reporting. On or before July 1, 2019, covered employers must conspicuously post their sexual harassment reporting policy and submit a copy of that policy to OHR.  Employers must also annually report (beginning on July 1, 2019) to OHR “the number of instances of sexual harassment reported to management and the total number of reported harassers who were non-managerial employees, managerial employees, owners, or operators.”
  • Annual Wage Payment Law training. On an annual basis, covered employers must have each owner/operator and manager attend in-person or online training about the D.C. Wage Payment Law.  Employers must also offer their employees the opportunity to attend such training.  By December 31 of each year, employers must certify to the D.C. Department of Employment Services (DOES) that the training requirement was met.
  • Use of a third-party payroll business. Starting in 2020, covered employers (except hotel employers) must use a third-party business to prepare their employee payrolls.  Those payroll businesses must, in turn, submit quarterly reports that certify that every employee was paid at least minimum wage and that include the employer’s tip-out policy. For their part, employers must provide itemized wage statements to each employee that include that employee’s tip-declaration form showing the amount of cash and credit-card tips the employee received.

The Act was submitted on October 30 for a 30-day congressional review period (as is required of any non-emergency local D.C. law) and is expected to take effect soon after that period expires.  Employers who have questions about the practical implications of this Act for their business may wish to contact an attorney.

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