By Adam Pagnucco.
One of the hottest recent issues in D.C. politics has been an effort to eliminate the tip credit for minimum wage. That has played out over multiple ballot questions and is now being implemented. But the fight is not limited to D.C. It’s going on all around the country and now it’s about to erupt in MoCo.
Tip credits are designed to allow employers to pay less than the standard minimum wage to workers who earn tips. In Maryland, the current minimum wage varies between $12.80 and $15 depending on employer size with higher minimums in Montgomery and Howard counties. However, employers are allowed to pay a minimum of $3.63 per hour to employees earning at least $30 a month in tips. (The minimum is $4 in Montgomery County.) The lower minimum plus tips must equal the standard minimum wage. The state’s Department of Labor states, “Subject to the adoption of related regulations, restaurant employers who utilize a tip credit are required to provide employees with a written or electronic wage statement for each pay period showing the employee’s effective hourly rate of pay including employer paid cash wages plus tips for tip credit hours worked for each workweek of the pay period.”
The tip system is opposed by some and One Fair Wage, a nationwide group, was founded to end it. Seven states – Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington – prohibit tip credits. D.C. was one of the newest battlegrounds. In 2018, 55% of D.C. voters voted for Initiative 77, which would have phased out tip credits, but the city council voted to repeal the initiative. Advocates tried again, and in 2022, 74% of D.C. voters voted for Initiative 82, another tip credit repeal. D.C.’s tip credit is due to be phased out by 2027.
The tip system is a controversial issue in the restaurant industry. One Fair Wage calls it “a literal legacy of slavery,” linking it to sexual harassment and systemic racism. Many but not all employers embrace the tip system. Tipped employees appear divided about it. Both sides have research to back them up. We will explore that research in the future.
But for now, Montgomery County will experience the next tip credit fight. After a tip credit repeal bill died in the General Assembly last spring, advocates shifted to the counties and found a local champion: Council Member Will Jawando, fresh off his triumph in passing a tough rent control bill. Check out the tweets below in which Jawando appeared at a repeal event staged by advocates and discussed the need for this change. Also in attendance were County Executive Marc Elrich, Council Member Kristin Mink and Delegates Marc Korman, Sara Love and Lorig Charkoudian.
Check out the video from MCM below in which One Fair Wage’s national president, Saru Jayaraman, refers to Jawando, Mink and Elrich as “folks who are championing legislation right here in Montgomery County.”
My sources tell me that advocates for tip credit repeal are now holding meetings with council members. According to the county’s lobbyist database, One Fair Wage has hired contract lobbyist Len Lucchi to represent them. Jawando announced in the video above that he plans to introduce legislation in September with support from Mink and Elrich that would match D.C.’s phaseout of the tip credit.
This is going to be an interesting battle, especially since the county’s restaurant industry has not fully recovered from the pandemic.
Buckle up, buttercup! We will be watching.