Tipped Workers Left Behind in Minimum Wage Hike

By Jeremy Bauer-Wolf, jeremy@marylandreporter.com

Minimum wages of tipped workers by state.
(Click image for larger rendition)

Many minimum wage workers will be getting a raise now that a hike to Maryland’s wage has been signed into law. But while advocates are ascribing the increase as a win, there’s a bitter aftertaste for one group that was left behind.

The minimum wage will increase to $10.10 over the next four years, but the wage for tipped workers was pegged at $3.63, their current pay, despite the fact that the minimum wage will climb nearly $3.

“In a blue state we shouldn’t have to make these compromises,” said Mat Hanson, director of the Raise Maryland campaign.

Hanson called the freeze for tipped workers “a step backwards,” saying he would have preferred the legislature compromise at 70% of the minimum wage.

“It’s a de facto pay cut,” he said.

Servers face challenges with tips

Britton Loftin, national policy coordinator for the organization Restaurant Opportunities Centers United, said a typical profile for a tipped worker is a young woman in her 30s, often a person of color, far cry from the stereotype of a teenager working for seed money, he said.

Most of these restaurant workers are not employed at chic, high-class cafes, Loftin said, but chain restaurants, like Chili’s or IHOP, where a customer’s bill might average $20. The non-profit organization represents restaurant workers who are not part of a formal union.

If the restaurant suffers a slow period, then the waiters don’t earn a salary, Loftin said.

“It’s fine for a Friday night, but what about a Monday lunch?” he said. “Or what if the Ravens don’t play, or it snows?”

Loftin also pointed out that many establishments force the waiters to share tips with the busboy or even the hostess.

“It’s a shame that Maryland politicians couldn’t see past their political safety net,” he said.

Law includes other exemptions

Raise Maryland, organized by grassroots advocacy group Maryland Working Families, initially advocated for the legislature to institute the $10.10 by 2016, while the House of Delegates proposal placed the end date at 2017. Minimum wage will increase to $8 January 1, 2015; $8.25 July 1, 2015; $8.75 July 2016; $9.25 July 2017 and $10.10 July 2018.

The legislature instituted a training wage for employees 20 years old and younger, at 85% of the minimum wage. Amusement park workers of all ages are also paid the federal minimum wage of $7.25 or the 85% figure.

Businesses, whose gross revenue falls below $400,000 — often local mom-and-pop ventures — are also exempt.

The bill’s passage ensures hundreds of thousands will see higher wages, Hanson said, but scheduling the $10.10 increase in July 2018 will diminish its purchasing power.

During negotiations, the House voted down an indexing amendment from Del. Heather Mizeur, a Montgomery County Democrat and gubernatorial candidate, that would have enacted an automatic bump to the minimum wage.

“This is a tremendous step forward for working families,” Mizeur said in a statement. “But because leadership in Annapolis settled, the wage will stagnate once again and the next governor will be running for reelection before it reaches $10.10.”

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