OCEAN CITY, Md. - A new bill aiming to increase the hourly wage for servers to $15 is sparking concerns among Ocean City's restaurant workers and owners. Jeanice Chester, a longtime waitress in the area, is particularly worried about how this change could reduce her earnings from tips.
"If I was making $15 an hour, I wouldn't be able to raise my family and myself as well as I can on my tips," Chester said. "After taxes, $15 an hour is about $8 an hour, and I can't do anything with that."
The Fair Wage Act of 2024 mandates all Maryland employers, regardless of size, to pay workers a minimum wage of $15 an hour. Currently, restaurants must ensure tipped employees reach this threshold with a base of $3.63 an hour plus tips. If servers do not meet the 15 an hour threshold, the restaurant owner would pay them the deference. The new legislation, however, proposes that workers would earn $15 an hour in addition to tips.
Ray Daugherty, a local restaurant owner, expressed his concerns about the financial viability of this change. "I'd have to cut my staff. I can't pay servers $15 an hour plus tips and kitchen staff more than that, and stay economically in business," Daugherty explained. He fears he may need to reduce his workforce or shift to a self-service model to manage costs.
Some restaurants have added a service charge on each check to offset the increased wage expenses. However, this approach is feared to further discourage tipping, impacting servers' overall income.
Servers like Chester are afraid that if the bill passes in its current form, customers might reduce their tipping habits, knowing that servers are guaranteed a higher hourly wage. "I think it will hurt restaurant owners too," Chester added, highlighting the potential for widespread effects within the industry.
A General Assembly hearing on the proposed One Fair Wage Act of 2024 is scheduled for February 14.