To all employers in Washington DC who employ tipped workers, heed this warning: as of July 1, 2019, you must comply with new notice, reporting, and training requirements, as set forth in the Tipped Wage Workers Fairness Amendment Act of 2018 (the “Act”). The Act, which became effective December 13, 2018, repealed a ballot initiative (Initiative No. 77) that would have changed how tipped workers in DC would have been paid to eventually match the standard minimum wage by 2026. With the goal of protecting the rights of tipped workers, the Act sets forth the following requirements for all employers of tipped workers in the District:
- All Employee Rights Notice Requirements: The Mayor must create and maintain a website that provides information about employees’ rights under various anti-discrimination and labor laws, including information about how to report violations of such laws. All employers (not just those with tipped workers) must display a poster that contains the website address, a list of the anti-discrimination, labor, and federal laws, the hourly minimum wage, and the hourly tipped minimum wage. The poster is provided by the Mayor’s office and must be posted in a conspicuous place accessible to all employees. Employers must also maintain printed copies of all of the information contained on the website and compile them in a single location and make the documents available at every location where the poster is displayed. Employers must make sure these documents are up to date on a monthly basis.
- Tipped Employee Rights Notice Requirements: The Mayor must create and distribute written materials concerning the rights of tipped workers. Employers of tipped workers must distribute the materials to all of their employees. Additionally, employers who employ tipped workers cannot take the tip credit against tipped employees’ wages unless they provide certain written notices to the employees, including, but not limited to: (1) information regarding the tipped minimum wage and regular minimum wage; (2) if tips are not shared, notice that the tipped employee shall retain all tips received; (3) if the tips are shared, provide the tip-sharing policy; (4) the percentage by which tips paid via credit card will be reduced by credit card fees. Any time an employer revises its tip sharing policy, it must provide employees with the new proposed policy before implementation. The tipped minimum wage is only applicable if the employees retain all gratuities (including via a lawful tip-sharing policy).
- Sexual Harassment Training and Reporting Requirements: All employees of employers who employ tipped workers must undergo sexual harassment training that includes how to respond to sexual harassment by co-workers, management, and patrons. Non-managerial new hires must receive training in person or online no later than 90 days after the date of hire, unless the employee received training within the last two years. Non-manager employees who were hired prior December 13, 2018, as well as owners and operators have two years to attend the training in person or online. Managers must attend in-person training at least once every two years. The Office of Human Rights must provide the sexual-harassment training course to employees, or it may certify a list of providers who may provide the training. Employers must submit certification to the Office of Human Rights for any employee, manager, owner, or operator of a business who completed a training provided by a certified trainer within 30 business days after completion of the training. The Office of Human Rights must maintain records of each individual who took the training for five years.
- Sexual Harassment Policy and Reporting Requirements: As of December 13, 2018, the employers must document all instances of reported sexual harassment, including whether the harasser was a non-managerial employee, managerial employee, owner, or operator. No later than July 1, 2019, and annually thereafter, employers must report to the Office of Human Rights the instances of reported sexual harassment. Additionally, no later than July 1, 2019, employers must create, post, and distribute to its employees – and file with the Office of Human Rights – a sexual-harassment policy concerning how employees can report instances of sexual harassment to management and to the Office of Human Rights.
- Third-Party Payroll Service and Wage Reporting Requirements: Beginning January 1, 2020, all employers who employ tipped workers (other than hotels) must use a third-party payroll service. The payroll service, and hotels, must submit a quarterly report to the Mayor within 30 days of the end of each quarter that certifies that each tipped worker was paid at least minimum wage (including tips). Until then, all employers must submit quarterly reports using the Department of Employment Services’ online portal.
- Itemized Wage Statement Requirement: All employers must provide employees with an itemized wage statement at the time of wage payment, which includes: “(1) the date of the wage payment; (2) gross wages paid; (3) deductions from and additions to wages, including a separate line for gratuities; (4) net wages paid; (5) hours worked during the pay period; (6) employee’s tip-declaration form for the pay period, delineating cash tips and credit-card tips; and (7) any other information as the Mayor may prescribe by regulation.”
- Training On All Requirements Under the Act: All employers, business owners, and operators of businesses who employ tipped workers must attend annual in-person or online training on the requirements of the Act. Managers must attend in-person training annually, and employers must provide employees the opportunity to attend in-person or online training on the requirements of the Act at least once. By December 31 of each year, employers must report to the Department of Employment Services that they have complied with all of the requirements under the Act.
If you employ employees who receive tips in DC, you should discuss the Act with counsel to ensure you are in compliance with this onerous law.