Tzedek DC applauds the passing of the DC's budget, which raises the threshold for Clean Hands certification from $100 to $1,000.
On Tuesday, June 25, the Council of the District of Columbia voted unanimously to pass the “Fiscal Year 2025 Budget Support Act of 2024” (BSA). The BSA takes effect on October 1, 2024, and includes the subtitle “The Clean Hands Certification Economic Expansion and Revitalization Amendment Act of 2024,” which raises the threshold for Clean Hands certification when applying for occupational and small business licenses from $100 to $1,000 for debts owed to the District government.
Once it takes effect, the BSA’s subtitle inclusion means that individuals with fines and fees or other debts owed to the DC government will no longer be locked out of business and occupational licensing unless the amount owed is over $1,000. Further, the DC Government has now clarified that traffic debt, including parking tickets, speeding fines, and automated traffic enforcement fines, is not reviewed for a Clean Hands certification for the majority of business and occupational licenses sought by workers in the District from the Department of Licensing and Consumer Protection.
While further reform is needed, the reform will empower more workers to obtain business and occupational licenses to work in the District, combat racial income disparities, and create a first step towards eliminating a barrier to work that harms DC’s most vulnerable residents.
The current Clean Hands Law automatically disqualifies anyone with over $100 in unpaid fines and fees of any kind from obtaining DC government-issued occupational and business licenses. It affects more than 125 occupations, representing over 48,000 workers, including barbers, cosmetologists, nurses, social workers, plumbers, HVAC cleaners, food vendors, and dozens of other occupations crucial to the District’s economy. Nearly one in five DC workers must get an occupational license before they can legally do their jobs. The BSA subtitle will raise the $100 threshold to $1,000 and create a more equitable workforce in the District.
The District has an especially wide racial wealth gap. White households have, on average, 81 times the wealth of Black households and 22 times the wealth of Latino households, and Black residents are five times more likely to live in poverty than white residents. The current Clean Hands Law and $100 threshold exacerbate and help perpetuate this gap. The DC Council’s Office of Racial Equity (CORE) has concluded that “[b]ecause of the Clean Hands policy, Black residents are disproportionately blocked from occupational licenses [or] starting a business…. This leaves Black residents disproportionately impacted by fines but with fewer opportunities to build wealth that may help them pay debts resulting from fines and fees.”
In December 2023, Tzedek DC released “Locked Out: How DC Bans Workers with Unpaid Fines from More than 125 Jobs or Starting a Business, and What We Can Do About It,” a report on the need for reform of DC’s Clean Hands Law. The Locked Out report, which was supported by a coalition of more than 20 local partners, shares the stories of directly impacted residents, illustrates the policy and legal problems of the current system through data-based explanations, and shows how DC’s counter-productive law makes it an outlier in the region and in the nation.
Alongside the release of the Locked Out report, Tzedek DC worked with DC Councilmember Kenyan McDuffie to draft the “Clean Hands Economic Expansion and Revitalization Amendment Act of 2023.” This pending bill, separate from the one passed in the BSA, would end the Clean Hands Law’s lockout of occupational and small business licenses for those with unpaid fines and fees to DC. The bill was introduced in December 2023 and received a hearing on June 20, 2024, where support for Clean Hands reform came from a wide coalition, including impacted workers, local advocacy groups, restaurant and nightlife operators and industry representatives, unions, and government officials.
The Council has faced a tough budgetary season this year, and Tzedek DC partnered with Councilmember McDuffie to ensure Clean Hands reform was included in the budget. “Our policy team worked with Councilmember McDuffie’s office to find meaningful Clean Hands reform that fit the tough fiscal realities of this year’s budget process,” said Tzedek DC Policy Director Melissa Millar “Raising the Clean Hands threshold from $100 to $1,000 is an important first step in removing barriers to work for low-income workers in the District.”
We urge the Council to consider the Clean Hands Economic Expansion and Revitalization Amendment Act of 2023 and listen to the large and diverse coalition calling for the removal of Clean Hands as a barrier to work. For more information about our advocacy work, visit www.tzedekdc.org.
About Tzedek DC
Tzedek DC’s name is drawn from the ancient Jewish teaching “Tzedek, tzedek tirdof,” or “Justice, justice you shall pursue.” Headquartered at the University of the District of Columbia David A. Clarke School of Law, Tzedek DC’s mission is to safeguard the legal rights and financial health of DC residents with lower incomes facing the often-devastating consequences of debt collection and credit-related obstacles. This mission is carried out as anti-racism work in response to the massive wealth gaps tracking race in DC and nationwide. Tzedek DC seeks to serve and empower its client base, which is comprised of 90% Black people, 60% women, and 25% disabled community members. Our strategic approach combines three synergistic activities: (i) free direct services—legal representation and advice and financial counseling; (ii) working in coalition to make systemic change; and (iii) providing bilingual community legal education on debt collection, identity theft, and credit management. Since 2017, Tzedek DC has served over 3,000 client households in legal matters and catalyzed systemic reforms benefiting hundreds of thousands of DC residents.