DC Becomes Latest Jurisdiction to Dramatically Hike Minimum Wage

Under the Fair Shot Minimum Wage Amendment Act of 2016, DC’s minimum wage, which is scheduled to increase to $11.50 on July 1, 2016, will increase approximately 70 cents per year thereafter until it reaches the $15 per hour level in 2020. During each successive year starting in 2021, the minimum wage will increase in proportion to the increase in the Consumer Price Index. The Act also increases the minimum wage for employees who receive gratuities to $3.56 per hour on July 1, 2017, $4.35 per hour on July 1, 2018, $5.14 per hour on July 1, 2019, $5.93 per hour on July 1, 2020, $6.72 per hour on July 1, 2021, $7.50 per hour on July 1, 2022 and to 50% of the minimum wage in each year thereafter. The Act becomes effective following the expected approval by Mayor Muriel Bowser (D) and after a 30-day period of congressional review under the DC Home Rule Act.

The Act amends the Minimum Wage Revision Act of 1992. In addition to the above, the new amendment authorizes penalties for an employer’s failure to comply with the minimum wage for employees who receive gratuities and reporting requirements for the same. The Act authorizes the Mayor’s office to establish such penalties. The Act otherwise keeps the existing minimum wage law intact. 

The Act is being heralded as a major victory for local and national labor unions and groups. By passing the Act, DC joins the ranks of other jurisdictions such as San Francisco, Los Angeles, and Seattle who have raised wages to those significantly higher than the Federal minimum wage, which currently sits at $7.25 per hour. Currently 21 states follow the federal minimum wage. Traditionally progressive states, such as California and New York, recently passed legislation that will lead to eventual levels of $15 per hour. In 2014, Chicago approved a $13 minimum wage by 2019. While Congress has not increased the minimum wage since 2009, the Obama Administration issued an Executive Order in 2014 raising the minimum wage for federal contractors.