On July 28, the DC Council passed a reform as part of its budget bill vote that, when it takes effect, will firmly end DC’s automatic disqualification from occupational and business licensing for workers with debt to the DC Department of Motor Vehicles.
Until 2024, the District's Clean Hands Law automatically disqualified anyone with over $100 in unpaid fines and fees from obtaining occupational and business licenses issued by the DC government. This debt-based punishment has affected more than 125 occupations, covering over 48,000 workers—nearly one-fifth of all DC workers—including food vendors, barbers, cosmetologists, nurses, social workers, plumbers, and dozens of other occupations crucial to the District’s economy.
Tzedek DC documented the Clean Hands law’s disproportionate impact on workers with lower incomes and its role in exacerbating racial income inequality in our narrative-changing 2023 report, “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”.
Following the report, Tzedek DC, workers in our client community, and a diverse range of 20+ advocacy partners engaged with the District’s Executive and the DC Council and sought relief from the courts for workers who were desperate to get back to work.
Along with pro bono co-counsel from the Washington Lawyers’ Committee and Weil, Gotshal & Manges LLP, Tzedek DC filed a constitutional challenge on behalf of a group of workers, based on the law’s failure to provide due process before disqualifying workers from licenses. Following our suit, the DC government changed its guidance on eligibility for occupational and professional licensing, updating the Office of Tax and Revenue’s website to indicate that parking and traffic debt would no longer be a bar to obtaining an occupational or business license.
The Council’s Office of Racial Equity (CORE) 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.” The Council in 2024 then took a positive initial step of raising the threshold from $100 to $1000 of fines and fees.
Because key language in the law remained unchanged, however, parking or traffic debt continued to be connected to occupational and business license eligibility, notwithstanding the updated guidance from the Office of Tax and Revenue. Thanks to the now-passed change in law, championed by DC Council Economic Development Committee Chair Kenyan McDuffie following a Committee hearing and testimonies from impacted residents, both workers and public servants will have important clarity.
Despite this success, the budget bills passed this year by the federal and District governments will, in many ways, hurt vulnerable residents and lead to more debt, more people without health insurance, and continued barriers to opportunity, stability, and health. More reform is needed, and Tzedek DC commits to continuing our coalition-based advocacy.
Meanwhile, today, we celebrate this step towards fuller economic inclusion, resulting from years of work in collaboration with coalition partners and, most importantly, the DC residents who shared their stories, time, and voices with policymakers to make systemic change.
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 and with offices also in Ward 8, 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 our 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.