MONTGOMERY COUNTY, Md. (DC News Now) — Montgomery County is considering raising the minimum wage for tipped workers, causing debate among customers, workers and owners.
While many customers and servers are in favor, many owners say it will burden their bottom line.
The proposed change could raise wages for nearly 15,000 tipped workers in the county.
Right now, the tipped minimum wage is $4 an hour, so many servers rely on customers tipping them well.
The minimum wage for non-tipped employees, however, is $16.70 for businesses with 51 or more employees, $15.00 with 50 or fewer employees and $14.50 with 10 or fewer employees.
Employers are required to make up the difference to get to the full county minimum wage but Councilmember Will Jawando says that doesn’t always happen.
“According to surveys, more than a third of workers said their tips did not bring their wages up to the minimum wage,” Jawando said. “In Montgomery County, restaurant workers are twice as likely to live in poverty.”
Jawando introduced a bill on Tuesday to get rid of the tipped minimum wage gradually over the next several years.
“Sometimes you get good tips, sometimes you don’t. I feel like that was going to bring more stability into their lives, which is something that this industry has really suffered from since the pandemic,” said Salim Salifou, manager at Planta in Bethesda.
Salifou thinks a wage increase is a good move – so do his customers.
“You have to invest in what you believe in. So if you believe in the product that you’re selling, you’ll make the money, you’ll do the investment and it will pay off in the end,” said Tina Starks, a customer.
After Initiative 82 passed in D.C. raising the tipped minimum wage, many restaurants tacked on service fees, confusing customers.
This begs the question: are patrons in Montgomery County willing to pay more?
“I think it depends on like what the service fee is and you know, who who is to benefit from that? Like, is it the restaurant and the owners?” said another customer, Danielle Collins.
The Restaurant Association of Maryland strongly opposes the legislation, saying the following in a statement:
“Restaurant server earnings would significantly decrease if the tip credit was eliminated because most restaurants would be forced to impose a service charge on customer checks to cover the substantially higher labor costs. Customers are unlikely to tip on top of service charges. And there would be no incentive for servers to provide the best possible customer service because they would no longer be rewarded with tips.”
Jawando is aware of the problems D.C. has been facing with service charges.
“I’m working with our council attorney on a separate bill because it’s not germane to this bill to introduce that would provide for transparency for these fees,” Jawando said.
If passed, the bill would steadily increase the base wage by $2 an hour starting July 1, 2024, until the sub-minimum wage is phased out completely in July 2028.
A public hearing is scheduled for October 10.