Much like D.C. voters did in 2022, Maryland voters might get to decide whether to phase out the state’s tipped minimum wage. Maryland Delegate Adrian Boafo plans to introduce a bill by the end of February that would put the contentious issue of tip credit before voters this November — though the bill’s path to passage will be a challenge.
“Taking it to the voters really allows us to see not only what our constituents want, but also what workers actually truly want,” the Prince George’s County Democrat tells DCist/WAMU.
Currently, employers of tipped workers like restaurant servers are allowed to pay those customer-facing workers a base wage of $3.63 per hour as long as customer tips increase their total earnings to at least the state’s minimum wage of $15 per hour. If tips fall short, employers must pay their workers the difference so they earn the minimum wage. The elimination of this practice, which is known as a tip credit, would fundamentally disrupt the state’s restaurant industry.
Lawmakers in Maryland counties near D.C. already tried this to no avail. There were bills in Montgomery and Prince George’s counties introduced late last year that would have phased out tipped minimum wage in both counties, but the sponsors of both bills pulled them, saying they would defer to statewide legislation instead.
Boafo delivered that legislation, proposing a bill earlier this year that would prohibit employers from claiming the tip credit beginning in January 2027. But the Democrat representing Prince George’s County withdrew that bill last week and now says he will soon introduce a constitutional amendment, which means putting the issue on the ballot if it passes.
He believes the constitutional amendment has a likelier chance of passing the legislature based on his conversations with colleagues, he says.
“We just realized that we were doing it in a more difficult way,” Boafo says of his original bill. “Our conversation was just being held in a silo in the General Assembly and this will impact 106,000 people.”
The move also follows an unenthusiastic state Senate hearing on the issue. Several lawmakers expressed skepticism at that hearing after few Maryland restaurant employees showed up to testify in favor of eliminating tip credit. Even so, the bill’s primary sponsor in the Senate, state Sen. Arthur Ellis, has not withdrawn his bill — a companion to Boafo’s in the House — to phase out tipped minimum wage by 2027. It’s unclear if he supports putting the issue to voters; his office did not respond to request for comment.
Boafo’s new legislative strategy mirrors action taken in neighboring D.C., where residents voted in 2022 to phase out the tipped minimum over five years. Similar to D.C.’s ballot initiative, known as Initiative 82, Boafo’s proposed constitutional amendment would end the tipped minimum wage over five years, instead of three like his original bill.
Boafo’s proposed ballot measure would also establish customer protections around service charges, requiring restaurants with fees to clearly indicate to patrons where the money goes — language he says came from observing the District. Since the passage of Initiative 82, more and more D.C. restaurants implemented extra fees to offset the increased expenses — but owners are not always clearly communicating where the money goes, prompting guidance from D.C.’s Office of the Attorney General and lawsuits from a consumer group.
Boafo worked with One Fair Wage, the national organization that helped get Initiative 82 on the ballot, on the new legislative strategy. The group is optimistic because of a poll it commissioned that found 68.1% of 816 registered Maryland voters support raising the minimum wage for tipped workers to “$15 an hour with tips on top.”
Boafo wants to phase out tipped minimum wage because he believes that will increase the total earnings of restaurant workers, he tells DCist/WAMU. The median hourly wage of bartenders and servers in Maryland was $14.52 and $14.09 in May 2022, respectively, according to the U.S. Department of Labor — and that is only slightly higher than the state’s minimum wage at the time, which was $12.20-$12.50 per hour depending on the size of the employer.
Boafo’s thinking is if workers’ base wages incrementally increase and their tips stay consistent, they’ll have a higher take-home pay. He believes customers will continue to tip even if they know workers earn minimum wage. But he worries customers won’t tip at restaurants that charge a fee, which is why he wants to include language around service charge on the ballot.
The Restaurant Association of Maryland, a trade association representing hundreds of restaurants in the state, disapproves of efforts to eliminate tip credit because it believes the current system allows tipped employees to maximize their total earnings while also reducing labor costs for restaurant owners, many of whom own small businesses with thin profit margins.
The group and the National Restaurant Association have pointed to D.C. as an example. According to an analysis by the national group, full-service restaurants in D.C. cut jobs by 4.4%, or 1,300 positions, between May and November 2023, while jobs in the same sector increased by 7.5%, or 2,000 positions, during the same period in 2022. But a different analysis from One Fair Wage disputes that, showing D.C. restaurant jobs have modestly increased between November 2022 and 2023. One Fair Wage also says it is too soon to determine Initiative 82’s effects as it is not fully implemented — that is currently slated to happen in 2027.
In D.C., restaurant workers have so far described mixed results since Initiative 82 started to take effect in May 2023. Some workers tell DCist/WAMU that they have seen the wage bump Boafo hopes for in Maryland, while others say they earn less now because they make less in tips. D.C. restaurant workers, on average, made $1 per hour less in tips and overtime, between January 2022 and October 2023, but their hourly wages and total earnings have increased, according to data from popular point-of-sale system Square.
But before Marylanders weigh the pros and cons of phasing out tipped minimum wage, Boafo’s bill to put a constitutional amendment before voters must pass. It has various obstacles to overcome, including passing out of two different committees by mid-March and passing the House by a supermajority of members in April. Boafo admits the path is very challenging and the bill might be tabled until next session.
Meanwhile, ballots are pending in a few other states, and One Fair Wage is assisting in those campaigns. Already, seven states have banned tipped minimum wages and the District is on its way to doing the same.
The post Maryland Could Follow D.C. With Ballot Initiative On Tipped Minimum Wage appeared first on DCist.
Published Date : 2024-02-20 18:17:00
Source : dcist.com
