ROCKVILLE, Md. — Tipped restaurant workers in one Maryland county could be in line for a huge pay raise.
The Montgomery County Council on Tuesday introduced a billintended to reduce and ultimately eliminate what's known as employer tip credits.
Currently restaurant owners are only required to pay their workers a $4.00 hourly wage, so long as the amount of daily tips they earn equates to $15 per hour.
Under this new bill the required amount would increase from $4.00 to $6.00 starting July 1, 2024, and then by two more dollars every year through 2027.
That means by July 1, 2027 employers would have to pay $12.00 an hour.
If the bill passes - come July 1, 2028 - no tip credit would be allowed, forcing employers to pay $15.00 an hour.
Any employee earning more than $30 each month in tips qualifies under the proposed bill.
The County would insure compliance by requiring employers to submit a wage report within 30 days after the end of each quarter.
Washington D.C. has already begun phasing out subminimum wages for tipped workers. Seven states have gotten rid of it entirely.
"We understand that restaurant owners will need time to adapt. This phase-out is a full year later than DC's schedule," said sponsoring Councilmembers Will Jawando and Kristin Mink. "The subminimum wage is an outdated practice that leads to pay inequity. The time has come to ensure all Montgomery County workers earn a fair living wage."
Rebekah Paxton, director of research at the Employment Policies Institute, opposes the bill saying it could lead to business shutdowns and substantial job loss.
"Research indicates that eliminating tip credits causes earnings and job losses for restaurant employees, and forces businesses to shut down," said Paxton. "In neighboring Washington, D.C., diners and employees are frustrated by the aftermath: higher menu prices, more service charges, and lower tips for employees."
A public hearing for the bill is tentatively scheduled for October 10.
Earlier this year the Maryland General Assembly failed to pass a similar statewide bill, that would have required employers to pay higher wages sooner.
