It’s happened in D.C. and other parts of the country, and now Prince George’s County, Maryland, is joining Montgomery County in an effort to increase the tipped minimum wage at its restaurants.
Under a plan introduced Tuesday, the county would see tipped minimum wage of $3.63 per hour gradually go up to $13 an hour to equal the standard minimum wage. The legislation currently phases the increase in over five years, but an amendment is likely to speed that up to three years.
“This bill is for our restaurant workers — hundreds, if not thousands of them in this county — who are currently being paid subpar wages,” said Council member Ed Burroughs, who is backing the measure. “Being paid less than $4 an hour, it’s impossible to raise a family with this economy on that amount, hoping for tips.”
Burroughs also promised greater transparency on any service charges that restaurants might implement if the bill passes, acknowledging that it had a negative impact on tips in D.C. when Initiative 82 passed.
“You’ll still be able to tip in the same way that you do, it’ll just be a distinction that the service charge that is on your receipt does actually not go to the worker. That was a huge issue for a lot of workers, is that people believe that they didn’t have to tip because they saw the service charge,” said Burroughs. “In reality, that service charge goes to the restaurant, not the worker in most cases.”
But the Restaurant Association of Maryland is warning that meals in Prince George’s County are going to get a lot more expensive, as restaurants seek to cover labor costs that it says will quadruple should the bill pass.
“It’s bad for customers because restaurants will be forced to impose a 20% service charge on all customer checks to pay that higher labor cost,” said Melvin Thompson, senior vice president for government affairs and public policy with the Restaurant Association of Maryland. “It’s bad for the servers because customers are not likely to tip on top of service charges. So servers will earn significantly less overall than they do under the current tipping system. And this scenario is already playing out in D.C. as they begin to phase out the tip credit there.”
For his part, Burroughs doesn’t deny that dining out will get more expensive.
“When you work with any other industry, what you pay, in part, covers the salary of the people that work there,” said Burroughs. “This would be no different than that.”
Another sponsor of the legislation, Council member Sydney Harrison, said he’s backing the measure because of concerns about wage theft and a general lack of transparency about where tips go after you pay your check.
“You assume sometimes that that tip is going to the worker, right?” said Harrison. “That’s what is said. That’s what’s implied. What we’re saying is … we’re not sure that’s happening all the time.”
Harrison added, “This is not any bit punitive toward small businesses at all. This is about accountability and ensuring that wage theft does not happen, that the workers rights are represented, and that they have fair and accommodating livable wages … that they deserve.”
But Thompson said neither workers nor the restaurants really want this.
“This is being pushed by an out-of-state advocacy group that has a national agenda,” said Thompson. “Local policymakers should listen to local businesses and local tipped employees who don’t want this.”