A bill that will be introduced in the Montgomery County Council on Tuesday would raise the base minimum wage for tipped workers, if passed. Currently, servers and other workers who rely on tips are only required by county law to be paid $4 per hour before tips. In contrast, the county’s minimum wage for non-tipped workers is $16.70 for employers with 51 or more employees, $15 for employers with 50 or fewer employees and $14.50 for employers with 10 or fewer employees.
If passed, the minimum wage would increase at a staggered rate–going up to $6 in July 2024, $8 in July 2025, and so on in increasing increments of $2 until reaching the same rate as the standard minimum wage, according to a chart provided by a council staff member. The legislation is co-sponsored by Councilmember Will Jawando (D-At-large).
“I do think we’re at a unique moment right now where that foundational belief about human dignity for every worker is more [prevalent],” Jawando said. “The vast majority of Americans are in favor of unions, in favor of higher wages, and with inflation and inequality and insecurity growing, I think it has made it even more of an issue.
The legislation is similar to Initiative 82, which passed in Washington, D.C., last year, eliminating the tipped minimum wage.
Jawando said he hopes that passing wage laws similar to D.C. would create a level of standardization among restaurants in the area.
“Why would you be a low wage restaurant worker [in Montgomery County], when you can go just a couple of miles on the bus and make three or four times more?,” Jawando said. “I think it’s also imperative for us to remain competitive in our restaurant and temporary wage worker industry just in general.”
Councilmember Kristin Mink (D-Dist. 5) is co-sponsoring the bill with Jawando. She said that as a former server, she relates to the struggle of relying on tips, and hopes this legislation could provide more income security for tipped workers.
“I could have spent hours of my day and made basically nothing, not even enough to pay for parking and the gas to get back and forth,” Mink said. “This is an injustice that remains today, and now we have an opportunity to do something about it.”
But some restaurant owners are pushing back on the idea that tipped workers will make more money with a higher minimum wage.
Eric Heckman, the owner of Caddie’s in downtown Bethesda, said he is concerned this will discourage customers from tipping servers.
“To me, what it’s doing is giving a flat out raise without any return,” Heckman said. “Most servers are gonna suffer from this. You’ll see menu prices go up, and that will reduce the tips customers are willing to give. This is already happening in [D.C.].”
The Restaurant Association of Maryland (RAM) is opposing the proposed legislation.
“A statewide tip credit repeal bill considered in the Maryland General Assembly failed to pass earlier this year because of strong restaurant industry opposition and scores of servers who urged lawmakers to reject it because they make significantly more money under the current tipping system,” Melvin Thompson, RAM’s Senior Vice President for Government Affairs and Public Policy, wrote in a statement to MoCo360. “The restaurant industry and servers will continue to oppose such poor public policy proposals in Montgomery County and elsewhere in Maryland.”
Jawando and Mink said they are hoping to learn from issues seen from D.C.’s law, which is one reason for staggering the increase. In D.C., the $5.35 minimum was first increased to $6 in May, and then jumped again to $8 in July. This led many restaurants to add service charges, according to Axios.
The Montgomery County legislation intentionally implements a year between each increase. Jawando said this is to allow business owners more time to plan, budget and adapt.
Jawando and Mink believe the legislation will ultimately help county businesses and local economic development.
Mink cited a study from the Center for American Progress that found that businesses in jurisdictions that increased the tipped minimum wage were thriving.
“Businesses are still doing well,” Mink said. “Though the idea of changing this can be scary, when we look at the data, we know that things are going to be just fine, and the benefit to the workers who are going to be seeing these increases is tremendous.”
But Heckman isn’t buying it.
“The County Council is anti-business and development,” Heckman said. “I don’t feel like they’re listening to us.”
The bill will be introduced and discussed during the Montgomery County Council meeting on Sept. 19 that starts at 9 a.m. The final agenda has not been posted.
