OCEAN CITY, Md. -- A pair of bills have been introduced in the Maryland General Assembly that could lead to increased wages for employees who rely on tips. If passed, by 2027, tipped employees would be making the state's minimum wage.
But, this proposed legislation seems to have struck a cord with some in the Ocean City restaurant industry. Many business owners and restaurant staff fear this bill could end up doing more harm than good.
"This bill is intended to help people, what it does is hurts the people it's intending to help, it's a very shortsighted look on all the things," said Scott Heise, owner of Pizza Tugos in West Ocean City.
The state lawmakers who are proposing this bill said the goal is to ensure tipped employees know how much money they are going to be making at the end of each day, not leaving it up to chance.
According to Senate Bill 803, the payments would be increased in increments. Starting on October 1st, 2023, pay for tipped employees would still sit at $3.63 an hour. By January 1st, 2024, it would increase to $8.50.
On July 1st, 2024, it would increase to $10.50, on January 1st, 2025, $12.00, and by July 1st, 2026, the pay for tipped employees would be $13.50 an hour.
Beginning on July 1st, 2027, employers would need to pay tipped employees a wage at least equal to the statewide minimum wage.
But, some restaurant staff we spoke with worry that could lead to complacency, and business owners tell us they think this legislation could lead to higher prices for customers.
"I think there are a lot of shortsighted variables that the legislators don't understand and long-term effects that are going to negatively affect both the employer, the employee and customers," said Garvey Heiderman.
Heiderman, owner of The Hobbit Restaurant in Ocean City, said if the restaurant is paying employees more out of pocket, prices for customers rise.
"You're going to see us have to increase prices because we're going to have to increase payroll and the quality of service is going to deteriorate," said Heiderman.
Jacob Harbinson, a waiter at Bad Monkey in West Ocean City, can see that happening.
"It really is not as much of an incentive to go up to tables with a happy smile on my face if I'm not making the money I feel like I should when I work as hard as I do," said Harbinson.
Caroline Charun, a bartender at Papi's Taco Joint, said some security of knowing how much you'll make each now would be nice, but could come at an unwanted cost.
"Knowing what you're going to walk away with at the end of the night is a plus, but sometimes you get some really lucky nights that can end up paying your rent," sad Charun.
While workers would still be allowed to make tips, one thing they're worried about is if people know they're making minimum wage, they will be less inclined to tip. Eventually, they feel like tips will be phased out completely.
The bill has a hearing in the state senate on Thursday, March 2nd at 1:00pm, so still a lot of debate left before any votes are made.
