Tipped credit bill receives an unfavorable report

Date: April 15, 2015

Legislation that would have repealed the tip credit received an unfavorable report from the Senate Finance Committee. The Maryland Wage and Hour Law – Tip Credit Repeal bill, SB 659, would have required employers to pay the full minimum wage to employees who receive tips. This bill would have repealed the current $3.23 tipped wage and would have forced all Maryland employers to pay the minimum wage of $8.00 to all employees who earn tips.

As the law currently stands, employees who earn tip income must earn
at least the Maryland minimum wage when tips are included.  If they do
not, their employer is required to make up the difference – this is
known as the tip credit.  This legislation would have repealed this
requirement and instead required employers to pay all of their employees
at least the minimum wage, not including tips.

This law would have applied to each employee who:

  • is engaged in an occupation in which they regularly receive more than $30 each month in tips.
  • has kept all of the tips that they received.

Reasons to oppose this bill:

  • Census Bureau data shows that the average hourly wage for a restaurant employee earning tip income is $13.08, with top earners bringing in $24 an hour or more.
  • From costs in healthcare to the fluctuating cost of foods, the struggle for many small and family-owned employers in the food and hospitality services industry is real. In an industry that has tight margins, any state mandated increase in labor costs will force employers to make difficult decisions that may result in fewer hours, fewer jobs, and/or increased prices.
  • Maryland is in the process of a series of minimum wage phase-in
    increases, which will raise the minimum wage to $8.25 this July 1, 2015
    and continue to raise the minimum wage each year until it reaches $10.10
    in 2018.  For businesses in Montgomery or Prince George’s counties, the
    minimum wage will increase to $9.55 this October and continue to
    increase each year until it reaches $11.50 in 2017.

you to all our members who took action in opposition to legislation to repeal the
tip credit.  A special thank you to the Employment
Policy Institute
for their contributions in educating legislators and the
public on how harmful this legislation would be by testifying in Annapolis, and
creating an educational radio and YouTube ad.  To learn more about the Tip Credit, visit www.TippedWage.com

EPI’s Ad:

Related Content: Victories | State | Maryland

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