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DC Adopts New Requirements for Employers

12/01/18

Author: ADP Admin/Tuesday, December 4, 2018/Categories: Washington, D.C.

Overview: The District of Columbia has enacted legislation (B22-0913) that will require employers to meet certain notice, reporting, policy, and training requirements.

Effective Date: The law will become effective in parts, after a 30-day Congressional review and publication in the District’s register. Only days when at least one chamber of Congress is in session count toward the 30-day review period. Given each chamber’s tentative calendar for the remainder of 2018, parts of the law are expected to begin taking effect in early 2019. We will continue to monitor the status of the law and provide exact effective dates once known.

Details:
Requirements for All Employers:
All employers will be required to post a notice that contains information about the District’s various employment and nondiscrimination laws, including a link to a new District website that will have information for employees, and the currently hourly and tipped minimum wage. The poster will be drafted by the District. Employers must also maintain copies of the information posted on the website and compile it in a single source, such as a binder, which should be placed wherever a poster is posted. Employers must verify the information is up to date at least monthly.

Requirements for Employers of Tipped Employees:
B22-0913 makes several changes that apply to employers of tipped employees.

Harassment Training:
Employers of tipped employees must provide harassment training either in person or online as follows:
  • Employees hired after the law takes effect must receive training within 90 days of their date of hire, unless they have participated in such training within the past two years.
  • Employees hired before the law takes effect must receive training within two years of the effective date.
  • Managers must receive training at least once every two years.
  • Owners and operators must receive training at least once every two years.
Within 30 days of completion of the training, employers who use a certified training provider must submit a certification to the Office of Human Rights demonstrating that the individual participated in the training. The District will provide a sexual harassment training course or must certify a list of providers who can provide the required training. The training will include how to respond to, intervene in and prevent sexual harassment by co-workers, management and patrons.

Harassment Policy:
By July 1, 2019, employers of tipped employees must:
  • Provide the Office of Human Rights with a policy outlining how employees can report sexual harassment to the employer and the Office of Human Rights.
  • Distribute the policy to employees and post the policy in the workplace.
  • Begin reporting to the Office of Human Rights annually the number of instances of sexual harassment, including whether the reported harassers were managers, owners or operators, or non-managerial employees (employers must begin documenting such information by the effective date of the law).
Training on Wage Payment and Collection Law:
If an employer has at least one tipped employee, business owners, operators, and managers must receive training on the District’s wage payment and collection law (D.C. Official Code $ 32-1301 et seq.) at least annually. These employers must also provide employees with an opportunity to attend at least one training on the requirements of the law.

By December 31 each year, covered employers must certify that they have met all of the requirements of the law.

Payroll:
By January 1, 2020, employers of tipped employees, except hotels, must use a third-party for payroll. By January 1, 2020, third-party payroll providers and hotels must begin submitting a quarterly report to the District that certifies that each employee has been paid at least the minimum wage, including tips. Prior to January 1, 2020, employers of tipped employees must submit such quarterly report. The report must include the:
  • Name of each employee;
  • Number of hours each employee worked each week during the quarter;
  • Total pay, including tips, received by each employee each week during the quarter;
  • Average weekly wage for each employee during the quarter; and
  • Employer's current tip-out policy that the employer supplied to the third-party payroll provider for calculation of wages during the quarter.
The reports must generally be submitted online.

Notices:
To use the tip credit, an employer must first meet the following requirements:
  • The employer must provide notice of:
    • The provisions of D.C. Official Code $ 32-1003(f);
    • If tips are not shared, that the tipped employee must retain all tips received;
    • If tips are shared, the employer's tip-sharing policy; and
    • The percentage by which tips paid via credit card will be reduced by credit card fees.
  • All tips received by the employee must be retained by the employee, except for a valid tip-sharing arrangement.
  • If the employer uses tip sharing, the employer must have posted the tip-sharing policy.
Tipped employees must be provided with a copy of the employer’s tip-sharing policy (if any) at the time of hire.

Itemized Statements:
Existing law requires employers to furnish to each employee at the time of payment of wages an itemized statement showing the following:
  • Date of the wage payment;
  • Gross wages paid;
  • Deductions from and additions to wages,
  • Net wages paid; and
  • Hours worked during the pay period;
B22-0913 adds two additional requirements:
  • The statement must include a separate line for tips.
  • The statement must include the employee's tip declaration form for the pay period, delineating cash tips and credit card tips.
A "tip declaration form" is defined as a printed form provided by an employer to an employee that shows the total tips received, including the amount of the tip outs or share of a tip pool that an individual employee provided to another employee or the amount of the tip outs or share of a tip pool that the employee received from another employee, and the calculation by which the amount was determined, such as total tips received and hours worked.

The term "tip out" is defined as the amount or percentage of directly tipped employees' tips that they share with other employees such as bussers, bartenders, back waiters, hosts, and hostesses.

Tip Credit:
Despite efforts to eliminate the “tip credit”, the tip credit option for employers will remain. Employers may take a “tip credit” against their minimum wage obligations for employees who receive tips as long as the direct cash wages and tips equal or exceed the minimum wage.

The minimum cash wage required for tipped employees will be as follows:
  • $3.89 per hour through June 30, 2019.
  • $4.45 per hour from July 1, 2019 through June 30, 2020.
  • $5.00 per hour beginning July 1, 2020
If the employee’s tips and direct cash wages don’t equal or exceed the applicable minimum wage, the employer must make up the difference.

Action Required: Employers with employees in the District of Columbia, particularly those with tipped employees, should review the new requirements carefully and ensure compliance with the law. As always, please be sure to contact your HR Business Partner for guidance and if you have any questions.

This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.

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Tags: Compliance Cornerstate update12/01/18

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