Last June, the District of Columbia Council repealed a law that motioned to increase minimum wage for tipped workers. They countered with legislation that now aims to protect these employees from any wage-related abuse.
Far too often are tipped workers abused through frequent mismanagement of tip distribution and low minimum wages. Part of the problem resides with their nature of employment, which is most prominent among servers in the hospitality and food industries.
The current state of tipped employees
Before the introduction of the new law, DC employers of tipped workers were only required to pay $3.98 per hour, as long as the difference in tips earned equaled or exceeded minimum wage ($13.25 in DC). If an employee’s tip earnings were below that hourly threshold, the employer would then be obligated to pay the difference.
The new legislation, aka the “Tipped Wage Workers Fairness Amendment Act of 2018” doesn’t take any direct action to increase minimum wage, but does protect against payroll abuses.
So what does it mean?
The proposed fix to the system will require all employers who hire tipped workers to outsource their payroll to third-party vendors starting January 1, 2020. This will ensure proper and accurate reporting which will be processed by the District’s Department of Employment Services (DOES), which will crack down on employers who cut corners and shortchange their tipped employees.
Another clause in the new protective legislation exists to decrease workplace harassment. The Office of Human Rights (OHR) now requires that all DC businesses who employ tipped workers must file updated policies which outline how their employees can easily report harassment in the workplace by July 1st, 2019.
Managers will also undergo mandatory sexual harassment prevention and awareness training (provided by OHR, or OHR approved programs) no later than December 12, 2020, with the agreement to maintain their certification every 2 years.
Are you unsure if your business will be affected by the new change in DC employment law? Err on the side of caution and make sure your management is 100% compliant. Get in contact with our HR Management Team and we’ll make sure you and your employees are taken care of.
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