The District of Columbia Council has passed several pieces of legislation that impose significant obligations on D.C. employers, particularly those in the hospitality industry. Below are summaries of recent laws passed in the District and key obligations of each.
Amendments to the Tipped Wage Workers Fairness Amendment Act
In 2018, the District of Columbia passed the Tipped Wage Workers Fairness Amendment Act (the Act) with the primary goal to repeal Initiative 77, a referendum aimed at eliminating the availability of the "tip credit" in the District. While preserving the use of the tip credit in the District, the Act also imposes significant obligations on employers that employ tipped employees such as requiring the use of a third-party payroll service to process payroll and requiring wage statements itemizing the tips received by employees. The law also imposes significant training and notice requirements on all employers of tipped employees, although the implementation of such obligations was delayed as they were subject to budgetary funding approval. Effective December 3, 2020, however, the District of Columbia amended parts of the Act effective immediately (the "Amended Act"), putting these mandatory training and posting requirements into effect without any further delay.
Mandatory Training and Reporting
The Amended Act mandates sexual harassment training for all tipped employees, as well as for all managers and owners or operators of businesses that employ tipped employees. The Department of Employment Services (DOES) must provide an approved sexual harassment training course or otherwise certify a list of providers able to provide such training. Once the DOES acts, employers will be required to provide training on the following schedule:
- Current employees must receive in-person or online training within two years after training has been approved by DOES;
- New employees must receive in-person or online training within 90 days of hire (unless they have participated in approved training within the past two years);
- All managers must attend in-person training at least once every two years.
Employers are also required to promulgate sexual harassment prevention policies that must include clear incident reporting procedures. Employers must provide copies of these policies to DOES, although the deadline for compliance is currently unknown. In addition, employers of tipped employees must also provide annual mandatory training on the Minimum Wage Act Revision of 1992 and provide certification to the DOES that the training requirements have been met.
Universal Posting Requirements
These amendments now require that the mayor create a website by April 2, 2021, informing employees of certain employment rights under 10 different employment statutes, such as the right to be paid on time and at least minimum wage; receive a detailed pay stub; qualify for unpaid family and medical leave; be compensated for work-related illness or injury; and to remain free from discrimination and employer retaliation. Also by April 2, 2021, the mayor must provide employers with a universal poster of these rights that must be displayed "in a conspicuous place accessible to all employees," including in all breakrooms and by all time clocks in the workplace.
Employers displaying the summary poster need not also comply with the individualized posting requirements of: (1) the Living Wage Act, (2) the D.C. Human Rights Act, (3) the D.C. Family and Medical Leave Act, (4) the Parental Leave Act, (5) the Accrued Sick and Safe Leave Act, (6) the Minimum Wage Act Revision Act, (7) the Building Service Employees Minimum Work Week Act, (8) the Protecting Pregnant Workers Fairness Act and (9) the D.C. Workers' Compensation Act.
Employers are required to compile all the information provided on the new website "into a single source, such as a binder" and place a copy at every location the required poster is displayed. Employers are responsible for updating this binder at least monthly. Employers may be subject to a $100 per day fine for the period in which they fail to comply with these requirements.
Public Awareness Campaign
The amendments also direct the formation of a Tipped Workers Coordinating Council (Council), which will include tipped employees, employers and public agency representatives. The Council's main responsibilities will be to improve the coordination of wage policies, investigate wage theft involving tipped employees, and conduct regular and anonymous case reviews of wage violations claims.
Quarterly Wage Report Requirements for Tipped Workers
The District of Columbia Council also amended the Minimum Wage Act Revision Act to provide that employers with tipped workers must submit a quarterly wage report for the preceding calendar quarter to the mayor no later than 30 days after the end of each calendar quarter. This report must certify that each individual earning gratuities was paid at least the required minimum wage and further provide the following information:
- Each employee's name; average hourly wage received per week during the quarter, total hours worked at or above the minimum hourly wage; gross wages received per week; and total gratuities received per week; and
- A copy of the employer's tip-sharing policy used during the quarter or certification that such a policy was in place and that the employer will provide this information separately to the mayor.
For non-hotel employers, a third-party payroll provider must submit information. Hotel employers may self-submit wage reports along with a certification of accuracy. Employers that agree to submit the tip-pooling policy directly must do so within 30 days after the end of the calendar quarter; otherwise, it will be presumed that such a policy was not in place for the applicable quarter.
Reinstatement of Displaced Workers
The D.C. Council has passed the Displaced Workers Right to Reinstatement and Retention Amendment Act (Displaced Workers Act), which requires certain retail and hospitality employers to reinstate workers whose jobs were eliminated during the COVID-19 health emergency before otherwise offering open positions to other applicants.
The legislation applies to owners of restaurants, taverns, brew pubs, nightclubs, clubs, entertainment venues, and retail establishments that employed 50 or more employees as of March 1, 2020 and hotels that employed 50 or more employees as of December 1, 2019. It also covers contractors that employ 25 or more employees and has hired individuals to work as:
- food service workers in a hotel, restaurant, cafeteria, apartment building, hospital, institution, or similar establishment;
- janitorial or building maintenance staff in an office building, institution or similar establishment;
- non-professional employees to perform health care or related services in a hospital, nursing care facility, or similar establishment; or
- individuals who provide security services in an office building or institution or similar establishment.
An "eligible employee" means an individual who was employed to work at a covered establishment or for a contractor, and who ceased working at the covered establishment or for the contractor for reasons other than voluntary resignation or termination for cause
If the mayor approves the Displaced Workers Act, effective February 1, 2021, as positions become available with the contractor's or employer's operations, any covered employer or contractor seeking to fill an open position must first offer the position to employees who were discharged during the health emergency. This offer of reinstatement applies to all employees let go between December 1, 2019 by a covered hotel, and March 1, 2020 for other covered employers, and the last day of the public health emergency declared by the mayor's Order in response to the COVID-19 pandemic (currently set for March 31, 2021). Offers do not need to be made to:
- Salaried exempt employees;
- Employees who received severance payments in connection with their discharge; or
- Employees whose employment was terminated for "demonstrable just cause."
Offers must be extended to former employees if filling: (1) the employees' previous position; or (2) a position performing essentially the same duties requiring essentially the same skills as the prior position. The offer must be made in writing allowing a deadline of no less than three calendar days to accept or decline. Upon acceptance, the employee can be required to report within seven days, unless the employer requests a later deadline. Offers may be made based upon predetermined seniority lists or conditional offers can be extended to all eligible employees.
Change in Control
With limited exceptions, if there is an anticipated change in ownership, notice must be provided within 15 days prior to the transaction to: (1) all retained and eligible employees that the employer is experiencing or anticipates a change in controlling interest or identity of the employer and of an employee's right to reinstatement or retention; (2) applicable labor unions; and (3) all interested parties. The new owner cannot discharge a reinstated or retained employee within the first 90-day period without cause. At the end of the 90-day transition period, the new employer must perform written performance evaluations for each retained employee and, if the performance is deemed satisfactory, must offer the employee continued employment under the terms and conditions established by the new employer.
Employees can bring individual or class claims for potential violations and can seek back pay, putative damages up to treble the amount recovered and attorneys' fees.
Despite strong industry opposition, the D.C. Council passed the Displaced Workers Act on December 15, 2020, which is awaiting the mayor's signature. Upon approval, it is subject to the mandated congressional review period. The D.C. Council is also expected to pass an emergency measure containing largely the same provisions that, upon the mayor's approval, will take effect immediately.
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