By Sophie Foster
This article was originally published in the Oct. 26, 2023 digital edition of The Elm.
Maryland’s Montgomery and Prince George’s counties are deeply embroiled in a debate that has been rising to public attention in recent years: that of the ethicality of the tipped minimum wage standard.
According to ABC 7, bills being debated by the counties’ leaders would call for all tipped employees to earn minimum wage in addition to their tips by 2028, monitored by quarterly wage reports from supervisors. In 2024, that wage is set to reach a $15 an hour minimum statewide.
Conflict arises, however, in the aspect of the bill that outlines a gradual decrease of tip credits for servers and bartenders until their base wage is the county’s minimum wage. Some of the employees in question took to the streets to vocalize their disagreement.
The Restaurant Association of Maryland, along with a number of restaurant and service industry employees, held a rally in Prince George’s County in opposition to the bill, causing the county to table it indefinitely, according to ABC 7. The association claimed meals would become inordinately expensive to cover labor costs that would increase significantly.
RAM also argued that the steady removal of tip credits for the county’s workers would reduce wages that could otherwise reach $27 an hour or more in favor of minimum wage. Additionally, the group reminded legislators that all restaurant employees are required under minimum wage laws to earn at least the “full applicable minimum wage in base wages plus tips,” according to ABC 7.
This argument, while certainly stemming from a solid basis for concern, neglects the reality that the current rate in Maryland for tipped workers is almost $10 below the state’s minimum wage for untipped workers, at $3.63 an hour, according to WUSA 9.
Essentially, what Bill 098, pending in Prince George’s County, hypothetically calls for is a gradual increase of wage and decrease of tip credit used to calculate the minimum wage over the course of five years. In 2024, minimum wage for these employees would rise to $7, followed by $9 in 2025, $11 in 2026, $13 in 2027, and $15 in 2028. According to WTOP News, though, an amendment is likely to expedite that process to a three-year structure.
The bill from Prince George’s County in particular also indicates that neighboring jurisdictions, like Washington, D.C. and Baltimore, have also either passed or proposed similar legislative shifts “with the united goal of raising the standard of living,” according to the bill.
The fact that this conversation is not new to the DMV area could make the transition easier for these counties if they do eventually land on solidifying the bills into law. In part, that ease would come from the ability to learn from other cities’ missteps.
Prince George’s county council member Ed Burroughs promised, for example, that should the county land on the resolution, they would require transparency on service charges after D.C.’s Initiative 82 led to customer frustrations regarding heightened service charges and uncertainty about where that money was being directed.
Beyond Maryland, some of the nation’s biggest cities have also opted to make this shift, including Los Angeles and Chicago, two of the country’s three largest cities, according to Eater. These shifts have partially been born out of the One Fair Wage endeavor, which is fighting to take on New York City and Boston next.
It is important to note that this effort brings the U.S. closer to alignment with much of the rest of the world in policies for treatment of service industry workers.
According to Western Union, while the Americas and parts of Africa regard tipping as the standard due to low tipped minimum wages, the vast majority of Europe, Asia, and Australia do not view tipping as customary thanks to paychecks that factor in gratuity.
It cannot be overlooked that these bills, as they make their rounds across the nation, do not disallow tipping. RAM’s argument that raising wages would hurt rather than help employees is perhaps well-intended but misguided: for those currently making significantly higher than minimum wage due to high tips, that wage is still possible, if ideally no longer necessary.
The parallel reality of the matter, as well, is that $15 an hour does not match the cost of living regardless of industry. While these conversations are valuable steps toward employment stability, the end goal for all legislation should ultimately be pushing closer and closer to comfortability and fair quality of life for all minimum wage employees, tipped or otherwise.
Photo courtesy of Wikimedia Commons
Photo caption: Those in the service industry, such as restaurant employees, will be the most directly impacted by alterations made to tipped minimum wages.