Bill to Increase Wages for Tipped Employees in Montgomery County to be Introduced

A bill that would increase wages for tipped employees will be introduced at the Montgomery County Council meeting on Tuesday, September 19. Bill 35-23, County Minimum Wage – Tipped Employees would adjust the calculation of the minimum wage for tipped workers and phase out the tip credit amount under the Montgomery County’s minimum wage law. Currently, businesses are required to pay servers $4.00 per hour; if a server does not make the current minimum hourly wage ($15-16.70) per hour, employers are required to make up the difference.

If the bill passes, there will be incremental increases over the next five years:
• $4.00 per hour, until July 1, 2024;
• $6.00 per hour, effective July 1, 2024 until July 1, 2025;
• $8.00 per hour, effective July 1, 2025 until July 1, 2026;
• $10.00 per hour, effective July 1, 2026 until July 1, 2027; and
• $12.00 per hour, effective July 1, 2027 until July 1, 2028

The bill’s lead sponsors are Councilmembers Will Jawando and Kristin Mink. Per Montgomery County, “The tip credit represents an amount of the minimum wage a worker is expected to receive in tips. The current amount of the credit is the hourly minimum wage minus four dollars or a lesser credit if the employee or representative of the employee satisfies the Executive Director of the Office of Human Rights that the employee receives a lesser amount in tips. The limit and phase-out of the tip credit would be staggered over multiple years as proposed in the legislation.”

The bill is similar to Initiative 82, which became law in Washington, DC earlier this year. Proponents of the bill say it will reduce wage theft. Opponents of the bill say it will lower profits and increase prices for customers. A public hearing is scheduled for Oct. 10, 2023.