Prince George’s County restaurants could receive thousands of dollars if owners commit to raising employee wages to $15 per hour by the end of the year and apply to a new grant program.

The organization seeking to eliminate tipped minimum wage, One Fair Wage, in partnership with PG County and Capital One, created the grant for restaurateurs in response to a staffing crisis. One Fair Wage President Saru Jayaraman says local restaurateurs are struggling to hire because of low wages in the county and competitive wages elsewhere.

“It is actually the worst staffing crisis in the history of our industry,” says Jayaraman during a Thursday press conference, adding that surveyed workers say they won’t stay in the local restaurant industry unless they are guaranteed the full minimum wage with tips on top.

Maryland’s prevailing minimum wage is $13.25 per hour, and will increase next year. But for many restaurant workers, who get paid a tipped minimum wage that’s been stagnant since 2014, their hourly wage is $3.63 plus the promise of tips.

While restaurateurs legally have to ensure their workers earn the state’s prevailing minimum wage when tips are included, opponents of tipped wages say the requirement is not always followed and leave workers vulnerable to wage theft. The last federal compliance investigation of full-service restaurants was back in 2012 and found roughly 84% of the examined businesses violated labor law, much of it related to tips, according to the New York Times.

The grant program, called “Keep Restaurant Workers in Prince George’s County,” aims to help local restaurateurs phase out tipped minimum wage. An estimated 20 to 30 establishments will receive a grant valued between $5,000 to $7,500 each. The money is not expected to pay the workers’ full wages but to help restaurateurs transition to the new model.

Restaurateurs have until June 10th to submit their applications. Winners will be announced at a ceremony a few days later, on June 16.

To apply, not only will a restaurateur have to commit to paying all their workers $15 per hour by December 31, but also have to complete a training program within a month of the program’s start date. Plus, the restaurateur has to attend at least 3 advocacy events and will become a free member of RAISE High Road Restaurants. Restaurateurs will have to return the funding to One Fair Wage if they fail to meet any of the requirements.

Jayaraman and several PG County Councilmembers who joined her during the press conference, including Wala Blegay (Vice Chair), Mel Franklin (At-Large), and Ingrid Watson (District 4), believe the money could help local restaurants that are still struggling to recover from the COVID-19 pandemic. The program hopes to offer relief to bartenders and servers, who saw fewer tips and increased harassment when they returned to work in the summer of 2020, according to One Fair Wage. The advocacy group says an estimated 18,000 workers in Maryland left the restaurant industry due to worsening workplace conditions.

“Over two thirds of tipped workers in Prince George’s County are still women of color, mostly Black women,” says Jayaraman. “These are mostly Black women, single mothers, who are working in very casual restaurants and diners, small mom and pop restaurants struggling to this day, with the highest rates of actually poverty and sexual harassment of any industry in Maryland, any industry in the United States. And that’s because they have to put up with so much to get those tips.”

During the press conference, Franklin called attention to how controversial moving away from tipped minimum wage is. He recalled speaking with a prominent Black restaurant owner who said they could hardly make payroll.

“Those are real problems. But at the same time, we have workers who who are having struggles to make rent and make ends meet,” says Franklin. “So it’s a tough issue that we have to work together all around. You can’t have great restaurants without great workers. You can’t have great restaurants without great restaurant owners. Pitting them against each other makes no sense.”

The grant comes as efforts to phase out tipped minimum at the state-level stalled this session. Maryland state senator, Arthur Ellis, introduced a bill that would require restaurateurs to stop relying on tip credit by July 2027 but it did not pass out of the necessary Senate or House committees.

Jayaraman says Ellis already talked to One Fair Wage about re-introducing the bill next session, although his office says no decisions have been made yet on what bills he’ll introduce. She says there is a lot of momentum, at the state and local level to raising tipped workers’ hourly wages. She also Maryland Gov. Wes Moore supports these efforts.

D.C. voted to phase out tipped minimum wage by 2027. Tipped workers saw their first round of hourly wage raises thanks to the ballot initiative in May; their wages increased to $6 per hour plus tips. Their wages will increase again in July 1, to $8.

Jayaraman and others at the press conference believe more workers will leave Maryland for D.C. and other municipalities that offer restaurant workers a higher hourly wage. Meanwhile, some D.C. restaurant owners believe businesses will leave the city because of the higher labor costs.

This post has been updated to include comment from the office of Maryland state senator Arthur Ellis.