Maryland lawmakers discuss setting minimum wage for tip workers, business community pushes back

MARYLAND – “This is a relic of the past that we still allow to exist in Maryland. Lots of states are getting rid of it,” Senator Ellis said.

Currently, the minimum wage for tipped employees in Maryland is $3.63 per hour.

Senator Arthur Ellis says those workers need a more predictable pay. Through Senate Bill 803, the tipped wage exemption would be eliminated. “Tip workers have rent or a mortgage and they just can’t tell the landlord or the mortgage company that this was a slow month,” Senator Ellis said.

The bill is calling for a minimum wage of $15/hour for tipped workers plus tips. That minimum wage amount would match the state’s goal of that same rate by 2025.

Ocean City Hotels, Motels, Restaurants Association Executive Director Susan Jones says this could actually take money out of those workers pockets. “Currently a lot of employees who are in tipped positions in Ocean City make anywhere from $17-$50 an hour,” Jones said.

Jones adds that the change could also force employers to make difficult decisions like raising consumer prices. “If the person doesn’t make tips that will bring them up to the minimum wage, then the restaurant does have to pay the balance of the difference,” Jones said.

“Because they’re going to have to make up for some of those wages, prices will increase and it will cost more to go out to eat.”

Senator Ellis tells us the hospitality industry was one the hardest hit by the COVID-19 pandemic. He says his bill could not only attract new workers but boost local economies. “Studies have shown that when income in a community goes up, business activity goes up also,” Senator Ellis said.

In an effort to cut some costs, Jones tells us that restaurants have already started coming up with other ways to serve guests including investing in products that could eliminate the need for labor all together.

If passed, the bill will gradually remove the tip wage exemption before completely phasing it out by 2027.

The bill is expected to have its first hearing Thursday, March 2nd.