Know the Facts
+33%
of D.C. voters are dining out less since phasing out the tip credit began
56%
of D.C. voters have seen additional service charges
+51%
of D.C. voters have noticed higher menu prices
+$11M
in earnings has been lost for D.C. tipped workers under Initiative 82
Learn More About the Proposed Legislation
Council Bill 25-0058 would eliminate the tip credit, which is typically used by full-service restaurants and bars. Without the tip credit, these City businesses would be required to pay tipped employees a base wage of at least the full minimum wage (currently $15/hour) regardless of tips. This would quadruple labor costs for full-service restaurants in the City. This bill is being pushed by an out-of-state activist group.
Maryland’s State minimum wage law (which also applies in Baltimore City) allows employers to apply a tip credit to the minimum wage requirement for tipped employees.
The law allows employers to pay tipped employees (as defined in law) a base wage of at least $3.63 per hour. The tip credit is the difference between the required base wage and the full applicable minimum wage. By law, employers are required to make up any deficiencies if a tipped employee does not earn enough in base wages plus tips to make at least the full minimum wage per hour for the workweek. There is no “subminimum wage” for restaurant/bar tipped employees in Maryland, despite what the bill supporters claim. Most restaurant/bar tipped employees earn significantly more than minimum wage per hour with tips included.
Under the bill, City restaurants/bars could continue to pay tipped employees a base wage of at least $3.63/hour through June 30, 2026. After then, the tip credit would be phased out through annual increases in the required base wage:
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$6.00/hour (Effective 7/1/2026)
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$8.00/hour (Effective 7/1/2027)
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$10.00/hour (Effective 7/1/2028)
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$12.00/hour (Effective 7/1/2029)
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Full Maryland minimum wage, currently $15/hour, (Effective 7/1/2030) — no tip credit
The bill would also require such businesses to prominently disclose on the menu any service fees charged to customers, the amount and purpose of the service fee, and whether the fee is paid directly to tipped employees on top of base wages.-
Bill Primary Sponsor: Councilmember John Bullock (D-9)
Bill Co-Sponsors: Councilmembers Paris Gray (D-5)
James Torrence (D-7)
Phylicia Porter (D-10)
Jermaine Jones (D-12)
Odette Ramos (D-14)
Yes. But similar bills failed in the Maryland General Assembly, Montgomery County Council, and Prince George’s County Council due to strong opposition from local tipped employees and restaurant operators.
Rejected Elsewhere in Maryland
The same kind of legislation has already been rejected by:
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The Maryland General Assembly
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The Montgomery County Council
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The Prince George’s County Council
Baltimore shouldn’t be the test case for a failed idea.
