ROCKVILLE — A County Council committee voted Tuesday to support a locked base pay for tipped workers, a move beneficial to the restaurant industry that some say could hurt workers.
The Health and Human Services Committee recommended the bill, which would set the county’s base pay for tipped workers at $4 per hour rather than 50 percent of the state minimum wage, as it was previously. The bill sets out to make sure the county retains competitiveness even as it raises the minimum wage to $11.50 by July 2017 and the state goes to $10.10 by July 2018.
“We all want to provide protection … but it’s very clear to me that tipped employees make substantially more than minimum wage,” said Council President and committee chair George Leventhal (D-At large). He added that he was disappointed to support the bill because it means surrounding jurisdictions did not act to raise minimum wage for tipped workers and the county had to stay competitive.
But to Stacey Mink, communications director for Maryland Working Families, the bill neglects workers at cheap restaurants or tipped workers in other professions, such as bellhops and nail technicians. According to Working Families, about 40 percent of tipped workers are outside the restaurant industry.
“What this does do is it freezes wages for workers who work for tips in Montgomery County permanently at $4 an hour until the county council or the state council or the federal government overrides that. … Neither the state or the federal government is likely to do that,” Mink said. “In a county as progressive as Montgomery County that acted first to raise the minimum wage, it’s kind of astonishing.”
Under current state law, the state minimum base pay for tipped workers is frozen at $3.63 and would remain so as the state minimum wage rises. According to a chart prepared for the council materials, the county’s current law means the required base pay is already $4 and would get up to $5.05 by July 2018.
Employers from the restaurant industry testified at a public hearing on the bill that servers generally make more than enough per hour just in tips alone – the general manager of Seibel’s Restaurant in Burtonsville said her servers make an average of $22 an hour in tips.
When employees do not make enough in tips to meet minimum wage, employers have to make up the difference – but, Mink said, there is no guarantee that will happen. According to U.S. Department of Labor investigations between fiscal 2010 and 2012, the percentage of involved restaurants with wage violations was 83.8 percent.
But the bill’s more stringent reporting requirements would help address that, according to Council member Roger Berliner (D-1). The bill requires quarterly wage reports as well as the creation of an online reporting system.
“There are undoubtedly always going to be people that don’t comply with the law, which is why we strengthen the reporting requirements,” Berliner said.
He also said the bill would almost exclusively apply to restaurant workers, which is why the restaurant industry arguments became important. The bill would allow restaurants to dedicate more of their revenue to backroom workers, who make even less than the tipped waiters and waitresses.
“One of our big strengths of our economy is our restaurants. So it’s like ‘Why would we gratuitously take dollars that they could then allocate elsewhere when it’s not needed for this purpose?’ If it was needed for this purpose, oh, OK, but clearly, I was a waiter, all right? I didn’t do it for minimum wage. And even the small diners, you’re making more than minimum wage,” Berliner said.
At the same time, the council is considering a bill that would mandate earned safe and sick leave for employees who work in Montgomery County. The bill was in committee June 11.