Opinions on Maryland tip elimination bill divided by geography

Support comes from non-local reps

The fight to end sub-minimum wages for tipped restaurant workers found its way in front of the Senate Finance Committee on March 2 with advocates — and restaurant servers — on both sides of the argument.

“This bill is essential, particularly during the recent covid pandemic, to support thousands and thousands of restaurant workers in Maryland and hundreds of thousands of restaurant owners who are raising wages to recruit staff in the worst staffing crisis in the history of this industry,” said Sen. Arthur Ellis (D-Charles). “We’re asking for support to end this crisis.”

Ellis went on to claim that the current business model disproportionately affects women and people of color and is rooted in the emancipation of slaves whose former owners created the system to take advantage of free slaves.

“A small subsection of tip-wage workers make a lot of tips,” Ellis said. “They work in the white-table-cloth restaurants generally. You rarely see African-American men and women working there. The majority of people who are hurt by this slavery system are women and the majority are people of color — African Americans, Latinos, Asian American. I strongly believe this injustice must end in Maryland.”

A representative from One Fair Wage, a national nonprofit looking to bring all servers up to minimum wage, said that the workroom is “overwhelmingly women of color.”

“We really need a law that will support great employers who are raising wages right now to recruit staff, create a level playing field and signal to millions of workers that it’s worth coming back to work in restaurants,” the representative said.

On the other side of the issue, Melvin Thompson, senior vice president of the Restaurant Association of Maryland, said the organization is “strongly opposed” to the bill and pointed out that restaurants must make up the difference if their tipped employees fail to reach minimum wage.

“The tip credit is a lawful acknowledgment that tips contribute to the wages of tipped employees and allows employers to lose that portion of those tips to apply to the employer’s obligation to meet the minimum wage,” Thompson said. 

“Employers would likely have to add a service charge to the customer’s charge in order to cover the additional labor cost.”

Sierra Dacre, a 22-year-old server who has worked at Harrison's Harbor Watch in Ocean City for years, said the current system has enabled her to pursue her education as a nursing student.

Dacre spoke about how the current system is an incentive to earn every last dollar of one’s wage and described the new bill as a “participation trophy wage.”

“If I want to make more money, just climb the ladder,” Dacre said, “(The current system) was a path to better myself. Having a tip system in our industry offers the safety net of minimum wage if it’s a slow week and provides me an incentive to make on some nights a higher wage and top rate.”

Sen. Mary Beth Carozza has sided with those against the bill.

“This would be detrimental to restaurant operators, which already run on razor-thin margins, who are still recovering from the covid-19 pandemic, and hurts restaurant employees, including food runners, bussers, servers and bartenders,” Carozza said in a statement.

“With tips, their hourly range is $17-50 an hour. If Maryland is moving away from a tipping industry as this bill suggests, these employees would have far less earning potential.”

The next steps for SB803 will be its second and third readings before crossing over to the House of Delegates.

This story appears in the March 10, 2023 print edition of the OC Today.