On December 17, 2013 the D.C. Council unanimously passed a bill that would incrementally increase the minimum wage in the district to $11.50 by 2016. It is likely that the bill will become law by early 2014, and that the district’s minimum wage will begin to rise on July 1, 2014.

The district's minimum wage is presently $8.25 per hour. Under the proposed legislation, the minimum wage would increase to the greater of $1 over the federal minimum wage, or according to the following schedule: $9.50 per hour beginning on July 1, 2014, $10.50 per hour beginning on July 1, 2015, $11.50 per hour beginning on July 1, 2016, and a value indexed to inflation beginning on July 1, 2017. The proposed legislation also makes changes to the notice that is required to be given to tipped workers.

Unlike the bill that the D.C. Council passed this summer — but which failed to become law after Mayor Vincent Gray’s veto — this bill applies to all employers in the district, except the federal government. It does not provide an exception for employers with a collective bargaining agreement, nor does it provide an exception for small employers. That said, district law presently provides exemptions to the minimum wage law that this legislation does not alter. For example, the district's minimum wage requirements do not apply to executive, administrative, or professional employees.

The next stop for the bill is Mayor Gray’s desk. Mayor Gray has 10 business days to sign or veto the bill. If he vetoes the bill, the D.C. Council can override his veto with a vote of two-thirds. After Mayor Gray signs the bill or his veto is overridden, the bill will be sent to both houses of the United States Congress. If the Congress does not act to disapprove of the bill within 30 legislative days, it becomes law.

While Mayor Gray has indicated that he does not fully support the current bill, it is likely that the D.C. Council has the votes to override his veto, if he chooses to use his veto power. Therefore, in all likelihood, the bill will become law in the district by early 2014. Accordingly, the district’s minimum wage will begin to rise starting in July 2014.

Employers should pay careful attention to these developments, make business planning decisions to account for this change in labor costs, and ensure that they are prepared to comply by July 2014. Employers should also take this opportunity to review wage payment policies to confirm that the policies satisfy the requirements of applicable law.