LEGAL PUBLICATION

Pursuant to D.C. Code § l-1001.16(d)(2)(B)(ii), which provides that the D.C. Board of Elections shall “[s]ubmit the summary statement, short title, legislative form, and, if the measure is an initiative measure, the fiscal impact statement, to … [a]t least one newspaper of general circulation in the District[,], the Board hereby publishes the aforementioned formulations as follows, as well as the fiscal impact statement1 issued concerning Initiative Measure No. 87, the “District of Columbia Living Wage Amendment Act of 2026.”

INITIATIVE MEASURE

No. 87

SHORT TITLE

District of Columbia Living Wage Amendment Act of 2026

SUMMARY STATEMENT

If enacted, this Initiative would gradually increase the minimum wage to $25.00 per hour for eligible employees by July 1, 2029 and gradually eliminate the credit for tips received by tipped workers. The “tipped minimum wage” for tipped workers (currently $10.00 per hour, indexed to inflation) would gradually increase until July 1, 2031, when the base wage for tipped workers would match the regular minimum wage (currently $17.95 per hour, proposed to increase to $25.00 hour by July 1, 2029 and thereafter indexed to inflation). Service charges collected from customers by employers of tipped workers will belong to employees.

LEGISLATIVE TEXT

BE IT ENACTED BY THE ELECTORS OF THE DISTRICT OF COLUMBIA, That this act may be cited as the “District of Columbia Living Wage Amendment Act of 2026”.

Sec. 2. The Tipped Minimum Wage Increase Clarification Emergency Declaration Resolution of 2025, effective June 3, 2025 (Res. 26-134; 72 DCR 6620), is repealed.

Sec. 3. The Minimum Wage Act Revision Act of 1992, effective March 25,1993 (D.C. Law 9-248; D.C. Official Code § 32-1001 et seq.) is amended as follows:

(a) Section 3 (D.C. Official Code § 32-1002) is amended by adding a new paragraph (7B-1) to read as follows:

“(7B-1) The term “service charge” means any fee or charge added to a customer’s bill and required to be paid by the customer (other than taxes), by an employer which employs employees who customarily receive tips or gratuities.”.

(b) Section 4 (D.C. Official Code § 32-1003) is amended as follows:

(1) Subsection (a) is amended as follows:

(A) Paragraph (5)(A) is amended to read as follows:

“(A)(i) Except as provided in subsection (h) of this section and subparagraph

(B) of this paragraph, the minimum hourly wage for any employee of the District of Columbia or employee employed to perform services provided under contracts with the District of Columbia shall be as of:

“(I) July 1, 2016: $11.50;

“(II) July 1, 2017: $12.50

“(III) July 1, 2018: $13.25

“(IV) July 1, 2019: $14.00; and

“(V) July 1, 2020: $15.00.

“(ii) Except as provided in subsection (h) of this section and subparagraph

(B) of this paragraph, the minimum hourly wage for any employee who works in the District of Columbia and is not an employee of the District of Columbia or an employee employed to perform services provided under contracts with the District of Columbia shall be as of:

“(I) July 1, 2026: $20.00;

“(II) July 1, 2027: $21.75;

“(III) July 1, 2028: $23.50; and

“(IV) July 1, 2029: $25.00.”.

(B) Paragraph (6)(A) is amended to read as follows:

“(A) Except as provided in subsection (h) of this section, beginning on July 1, 2021, and no later than July 1 of each successive year, the minimum wage provided in paragraph (5)(A)(i) of this subsection, and, beginning on July 1, 2030, and no later than July 1 of each successive year, the minimum wage provided in paragraph (5)(A)(ii) of this subsection, shall be increased in proportion to the annual average increase, if any, in the Consumer Price Index for All Urban Consumers in the Washington Metropolitan Statistical Area published by the Bureau of Labor Statistics of the United States Department of Labor for the previous calendar year. Any increase under this paragraph shall be adjusted to the nearest multiple of $.05.”.

(2) Subsection (f) is amended as follows:

(A) Paragraphs (6), (7), (8), (9), and (10) are amended to read as follows:

“(6) Except as provided in subsections (h) and (i) of this section, as of July 1, 2025, the tipped minimum wage shall be not less than $10.00 an hour, with tips on top; provided, that the employee actually receives tips in an amount at least equal to the difference between the hourly wage paid and the minimum wage as set by subsection (a) of this section.

“(7) Except as provided in subsections (h) and (i) of this section, as of July 1, 2026, the tipped minimum wage shall be not less than $13.00 an hour, with tips on top; provided, that the employee actually receives tips in an amount at least equal to the difference between the hourly wage paid and the minimum wage as set by subsection (a) of this section.

“(8) Except as provided in subsections (h) and (i) of this section, as of July 1, 2027, the tipped minimum wage shall be not less than $16.00 an hour, with tips on top; provided, that the employee actually receives tips in an amount at least equal to the difference between the hourly wage paid and the minimum wage as set by subsection (a) of this section.

“(9) Except as provided in subsections (h) and (i) of this section, as of July 1, 2028, the tipped minimum wage shall be not less than $19.00 an hour, with tips on top; provided, that the employee actually receives tips in an amount at least equal to the difference between the hourly wage paid and the minimum wage as set by subsection (a) of this section.

“(10) Except as provided in subsections (h) and (i) of this section, as of July 1, 2029, the tipped minimum wage shall be not less than $22.00 an hour, with tips on top; provided, that the employee actually receives tips in an amount at least equal to the difference between the hourly wage paid and the minimum wage as set by subsection (a) of this section.”.

(B) New paragraphs (11) and (12) are added to read as follows:

“(11) Except as provided in subsections (h) and (i) of this section, as of July 1, 2030, the tipped minimum wage shall be not less than $25.00 an hour, with tips on top; provided, that the employee actually receives tips in an amount at least equal to the difference between the hourly wage paid and the minimum wage as set by subsection (a) of this section.

“(12) Except as provided in subsections (h) and (i) of this section, as of July 1, 10 2031, the tipped minimum wage shall be not less than the minimum wage as set by subsection

(a) of this section, with tips on top.”.

(3) Subsection (g)(3) is amended to read as follows:

“(3) All gratuities, tips, and service charges received by the employee or collected by the employer have been remitted to the employees who performed services directly for the customers from whom the fee was collected, in addition to such employees’ wages, and the employer has prominently disclosed the amount or rate of any service charge to the customer in a manner visible to the customer before the customer places an order; and provided that, the distribution of such gratuities, tips, and service charges has occurred as follows:

“(A) If a gratuity, tip, or service charge has been collected by the employer from a customer who obtained table service, such gratuity, tip, or service charge has been remitted to those employees who directly provided service to that table;

“(B) If a gratuity, tip, or service charge has been collected by an employer from a customer who received catering services from such employer for a meeting or event, the gratuities, tips, and service charges have been distributed equally among all employees who rendered any services in connection with such meeting or event; and

“(C) No portion of any gratuity, tip, or service charge has been distributed to any supervisory or managerial employees; except that, the parties to a bona fide collective bargaining agreement may establish rules for the distribution of gratuities, tips and service charges different from those set out in paragraphs (1), (2) and (3).”.

(4) Subsection (i) is amended to read as follows:

“(i) The provisions of subsections (f)(2), (3), (4), (5), (6), (6A), (7), (8), (9), (10), (11) and (12) of this section shall not apply to employees of the District of Columbia, or to employees employed to perform services provided under contracts with the District of Columbia. Those employees shall continue to be subject to the minimum wage requirements of this chapter as they existed before February 23, 2023, including the minimum hourly wage set by subsection (a)(5)(A)(i) of this section as increased by subsection (a)(6)(A) of this section, and to the requirements of all other applicable laws, regulations, or policies relating to wages or benefits, including the Living Wage Act of 2006, effective June 8, 2006 (D.C. Law 16-118; D.C. Official Code § 2-220.01).”.

Sec. 4. This act shall take effect following a 30-day period of congressional review as provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 813; D.C. Official Code § l-206.02(c)(l)), and publication in the District of Columbia Register.

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1The fiscal impact statement was issued on March 26, 2026, prior to the date the Board adopted the formulations for Initiative Measure No. 87.

MEMORANDUM

TO: The Honorable Phil Mendelson

Chairman, Council of the District of Columbia

FROM: Glen Lee

Chief Financial Officer

DATE: March 26, 2026

SUBJECT: Fiscal Impact Statement – District of Columbia Living Wage for All

Amendment Act of 2026

REFERENCE: Proposed Initiative Measure No. 87, as provided to the Office of

Revenue Analysis on March 5, 2026

__________________________________________________________________________________________________________________________________________________________________________

Conclusion

Funds are sufficient in the fiscal year 2026 through fiscal year 2029 budget and financial plan to implement the initiative.

Background

Under current law2 , the District minimum wage is $17.95 per hour as of July 1, 2025, and grows by inflation each year. The tipped minimum wage is $10.00 per hour as of July 1, 2025, and grows to be a codified percentage of the standard minimum wage through 2034, when it becomes 75 percent of the standard minimum wage.

The proposed initiative increases the minimum wage periodically from the current $17.95 per hour to $25.00 per hour as of July 1, 2029, and increases it by inflation 3 annually thereafter.

The proposed initiative also increases the minimum wage for tipped workers periodically, beginning on July 1, 2028, from the current $10.00 per hour, until it matches the regular minimum wage on July 1, 2031.

The initiative exempts the District of Columbia government and District of Columbia contractors from the tipped minimum wage increase.

The annual minimum wages prescribed by the initiative are in the chart below:

Under current law6 , employers may choose to pay their employees the lower tipped minimum wage if those employees also receive gratuities. This is known as receiving a tip credit against the full minimum wage obligation. Despite the lower minimum wage paid by the employer, the employer must ensure that these employees’ tips are at least equal to the difference between the tipped minimum wage and the standard minimum wage.7 If the tips do not at least equal this difference, then the employer must pay the employee additional base wages to ensure that the employee receives an amount equal to the standard minimum wage. Employers of tipped employees are required to use a third-party payroll company to submit their quarterly wage reports for employees receiving gratuities to the Department of Employment Services (DOES). Employers submit information through the DOES Employer Self-Service Portal or through paper submissions. If an employer fails to submit information, DOES sends a compliance letter and could initiate an audit or investigation.

Lastly, the initiative requires that any service charges collected by employers of tipped workers be given to workers.

Financial Plan Impact

Funds are sufficient in the fiscal year 2026 through fiscal year 2029 budget and financial plan to implement the initiative.

The initiative exempts from the wage increases District Government employees and employees working for a private employer under a contract with the District Government. Therefore, wage increases will not impact the District budget and financial plan in the form of increased personnel costs.

The initiative is not projected to require any additional enforcement resources at DOES. Today, employers must ensure that tipped employees earn the standard minimum wage, on average, including earnings from their employer-paid wages and tips. If the employee’s tips plus the employer-paid tipped minimum wage do not equal the standard minimum wage, then the employer must pay the difference. The Office of Wage-Hour at DOES currently enforces the tipped wage quarterly reporting requirement and the other elements of tipped wage laws. DOES also provides education and outreach to employers on how to comply with the law. The initiative’s periodic increases to the minimum and tipped minimum wages do not impose any new requirements on DOES.

The Office of Revenue Analysis’s (ORA) previous analyses of minimum wage changes in the District have found increases to minimum wage are likely to increase income for low-wage workers, cause businesses to recoup some additional costs from consumers through higher prices, and cause businesses to lower some costs through reduced employment. However, ORA does not forecast any significant revenue impacts from the proposed initiative as consumer and business responses to increased minimum wages may include several counter-acting effects.

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2 D.C. Official Code § 32-1003.

3 The minimum wage is increased in proportion to the annual average increase, if any, in the Consumer Price Index (CPI) for All Urban Consumers in the Washington Metropolitan Statistical Area published by the Bureau of Labor Statistics of the United States Department of Labor for the previous calendar year. Any increase under this paragraph is adjusted to the nearest multiple of $0.05.

4 D.C. Official Code § 32–1003(f)(6)(A). Tipped minimum wage will be 56% of standard minimum wage as of July 1, 2026, which will be $10.30.

5D.C. Official Code § 32–1003(f)(6)(A). Tipped minimum wage will be 56% of standard minimum wage as of July 1, 2027, but the amount is unknown at this time because it will depend on CPI growth in 2026.

6 Initiative No. 77 – Minimum Wage Amendment Act of 2018, effective October 11, 2018 (D.C. Law 22-163; D.C. Official Code § 32-1003).

7 D.C. Code § 32-1003(f)(1).