Published by: DC Jobs With Justice & Restaurant Opportunities Center-DC

Written By: Elizabeth Falcon & Margaret K. O'Hora

Checked

Out:

How DOES Collects ​

and Then Ignores

Evidence​ of Wage Theft​

Executive Summary

Executive Summary

Tipped workers in DC are at high risk of wage ​theft, and DC government does not do enough ​to protect them. DC will eliminate the two-tier ​wage system in 2027, but until then, much is ​needed to stop and prevent tipped workers ​from having their wages stolen.

DC Jobs With Justice and Restaurant ​Opportunities Center- DC analyzed one year’s ​worth of employee wage and tipping ​information provided by the DC Department of ​Employment Services (DOES) to determine ​whether employers are following the law and, if ​not, what DOES is doing about it.

Our analysis found that DOES regularly receives ​evidence that employers are breaking the law, ​but does not act to deter or punish these ​violations. Specifically:

• Many employers have reported to DOES that ​they failed to increase tipped workers’ base ​pay when the District minimum wage ​increased on July 1, 2021 including many that ​were paying $4.00 an hour or less.
  

• 217 out of 547 DC employers filing reports at ​DOES were not meeting their obligation to ​pay tipped workers the full minimum wage ​when a worker’s tips fell below the amount ​necessary to take a tip credit.
  

• DOES is not adequately punishing ​employers for these violations, because ​many employers continue to report ​violations over and over again.
  

THE ​DEPARTMENT ​OF ​EMPLOYMENT ​SERVICES IS ​DC ​WORKERS' ​FIRST LINE OF ​DEFENSE ​AGAINST ​WAGE THEFT

D.O.E.S. IS ​UNDER-​UTILIZING ​BOTH THE ​STRENGTH ​OF THE LAW ​AND THE ​INFORMATIO​N GAINED IN ​THE PORTAL

547 businesses reported into the Tip Portal in the year studied.

Businesses reported paying ​their workers less than the ​Tipped Minimum Wage at least ​once over the year. These ​workers were paid less than ​$5.05 by their employer

28%

Businesses reported that they ​failed to make up the difference ​between the Tipped Minimum ​Wage and the full minimum ​wage. These workers were ​paid less than $15.20.

39%

Recommendations

To encourage reporting by employers and prevent ongoing violations of District law, ​DOES should:

Identify employers ​with tipped workers ​by relying on ​government records, ​such as business ​registrations, tax ​filings, and liquor ​licenses, and impose ​fines any time they ​fail to file quarterly ​wage reports. If they ​do not begin ​reporting, DOES ​should open an ​investigation to ​review employee ​wage and time ​records.

Open workplace-​wide investigations ​into minimum wage ​violations (and ​potentially other ​wage and hour ​violations) any time ​the company fails to ​pay workers the ​updated Tipped ​Minimum Wage ​beginning on July 1.

Encourage ​compliance by giving ​reporting employers ​with minor violations ​a “cure” period, which ​is a time frame during ​which they can rectify ​reporting or pay ​discrepancies, to ​make wronged ​workers whole ​without incurring ​penalties.

In the event that ​employers fail to cure ​during that period, ​use all investigative ​tools and legal ​penalties available to ​bring businesses into ​compliance, make ​workers whole, and ​prevent future ​violations.

Develop and ​implement a course ​of action that is ​triggered through ​the Tip Portal ​including: ​immediately reaching ​out to companies ​that have missed a ​quarter after ​previously reporting, ​investigating ​companies that ​report Tipped ​Minimum Wage and ​hourly wage rates ​below DC’s wage ​laws, and requesting ​corrected information ​from companies with ​reporting ​inconsistencies.

Help substantiate ​complaints filed by ​tipped workers by ​reviewing Tip Portal ​reports.

Begin accepting ​week-by-week ​employee wage and ​time records, as well ​as tip sharing policies ​for those workplaces ​where tips are shared.

Publicize any ​workplace-wide or ​other major legal ​violations and/or refer ​major cases to the ​Office of the Attorney ​General.