Efforts are ramping up to eliminate tipped minimum wages in Montgomery and Prince George’s counties.

Montgomery County Councilmember Will Jawando (At-Large) will introduce legislation Tuesday that would phase out that county’s tipped minimum wage by 2028.

The bill would fundamentally change the wages of thousands of tipped workers, a majority of whom are restaurant servers and bartenders. Currently, tipped workers earn $4 per hour, with the expectation that customer tips will increase their total earnings to at least the county’s minimum wage (which ranges from $14.50 to $16.70), a process referred to as tip credit. If tips fall short, the employer has to pay the difference to ensure workers earn the minimum wage.

“Every worker, irrespective of their background [or] ability, deserves the dignity of making a living wage, a fair wage,” Jawando tells DCist/WAMU.

Under Jawando’s bill, tipped workers would start to see raises in their base pay next summer, with an increase to $6 per hour in July 2024, and then $2 an hour more each year until their base wages equal the minimum wage. He is confident the bill will pass.

The bill introduced on Tuesday would also ensure that the change does not inadvertently increase a restaurant’s rent (which could happen in leases where rent payments are tied to a percentage of sales).

Jawando says he introduced the bill because the tip model can contribute to income inequality — and because it’s part of the legacy of slavery, when employers forced freed African Americans to live off tips instead of compensating them. Most tipped workers are women of color, and Montgomery County’s tipped workers are three times as likely to have family income below the federal poverty line compared to those in other occupations, according to the Maryland Center on Economic Policy.

Jawando says he also introduced the bill to stay competitive with the District, where residents voted last year to phase out the tipped minimum wage by 2027. The base wages of tipped workers in the city has since nearly doubled to $8 per hour. “You can go just a couple of miles down the road in D.C. and get paid a lot more. That’s actually going to hurt our restaurant industry over time,” he says.

Critics say eliminating tipped minimum wage could actually harm some workers. Many customers will stop tipping and businesses will cut jobs or shutter entirely, they argue. People in D.C.’s restaurant industry were divided on the issue. While many supported the change, some owners argued they couldn’t afford the increased labor costs given how thin their profit margins are, and some workers were content with their earnings under the tipped wage system because well-heeled Washingtonians tipped them generously.

Jawando says he’s heard these criticisms. He says his bill is about creating “a level playing field” amongst workers, who are currently reliant on the whims of customers for their livelihood. He also says his bill will require a robust education campaign to explain that the bill will not eliminate tipping and that helps restaurateurs transition to a new payment system.

Jawando also suspects some restaurants in the county will add a service charge to offset increased labor costs, given what is happening in the District. (A few restaurants in the city have even called the charges “Initiative 82 fees.”)

That’s why Jawando is also introducing a second bill Tuesday that would require owners to be transparent about service charges, which are fees calculated as a percentage of the total bill. Unlike tips, which are federally required go directly to employees, an employer can use service charges however they see fit. If the second bill passes, restaurants will have to explain to patrons how owners are spending dollars from those fees. He does not oppose restaurateurs relying on a service charge to pay workers, calling it “one of many tools, particularly in the short term.”

“If I know that I’m paying a service charge that is helping to make sure that my server is getting paid a fair wage, I’m okay with that,” Jawando says, “as long as I know that’s what it’s going to.”

Jawando says he is confident that restaurants will be able to eliminate tip credit because some establishments in the county have already done so. His office estimates over 60 restaurants pay their servers at least $15 per hour.

He says plans to introduce separate legislation that would provide relief to businesses, particularly small independent ones, but he says he is still determining what aid could look like before introducing a third bill.

Restaurateurs, meanwhile, are bracing for a shake up. Wesley Yao, who owns local chain Kusshi Sushi, tells DCist/WAMU he supports the bill in theory but does not think it’ll work as intended.

That’s because he suspects his servers will make less money under Jawando’s bill because he assumes patrons will stop tipping when they pay more for a meal out (either through increased menu prices or added service charges). He says that his servers earn an average of $40 an hour with tips and that he cannot afford to pay them that much directly.

Yao thinks his business, which has several locations in Montgomery County, will also be less profitable if the bill passes. Despite tight profit margins (around 3.5%), he says his business will ultimately survive the change, though he’ll have to increase menu prices or add a service charge.

“Whatever they pass, I’ll follow it,” Yao tells DCist/WAMU.

Jawando’s commitment to support restaurateurs through a relief bill doesn’t give Yao much comfort. He says he opened his Silver Spring location for Kusshi Sushi in 2021 with the expectation of receiving a Maryland government grant that did not fully materialize.

Prince George’s County is also taking on tip credit. Councilmember Edward Burroughs of District 8 said last week he will introduce legislation this session to phase out tipped minimum wage, though he does not think it’ll be easy to pass.

Burroughs already secured a commitment from Councilmember Krystal Oriadha of District 7, who agreed to co-introduce the bill and vote in favor of it at a briefing before the council’s Government Operations and Fiscal Policy Committee Sept. 14. But at that same briefing, Councilmember Sydney Harrison of District 9 said he needed more time to review the issue when asked for his commitment.

Restaurant worker Alexander Chianga testified Thursday before the committee, which Burroughs chairs. Chianga, who supports his wife and five children, decried the $3.63 per hour tipped minimum wage in Prince George’s. He says the industry, which he has worked in for seven years, deteriorated when the COVID-19 pandemic hit.

“The situation got worse. Why? Because the tips dropped down and the harassment went up,” says Chianga, who is a member of One Fair Wage, the national organization working to eliminate the two-tier wage system for tipped workers.

In June, Amaka Anosa, who owns two locations of West African restaurant Jodeem Food Express in Prince George’s, was named a grantee of a One Fair Wage program to help her raise her workers’ wages to $15 per hour by the end of the year.

“People should be taken care of,” Anosa says, adding that she used to be a server. “I know how it is. I have kids. I know what it’s like to take care of four kids. When you are not paid well, it affects the family.”

But despite her support for eliminating tip credit, Anosa worries about executing it. Her new landlord, LV Collective, is requiring her to vacate her College Park location so they can redevelop — pushing her out of her five-year lease three years early. An LV Collective spokesperson says they are in active discussions with Jodeem on relocation.

“Right now, I’m going through a lot,” she says. “I just want to get myself out of this first. I don’t want to do anything that will further burden my mental health.”

Anosa also hasn’t received any money since the grantees were announced in mid-June — a process that has been delayed until a few more restaurants join the existing coalition of four grantees, according to One Fair Wage President Saru Jayaraman.

Still, One Fair Wage is optimistic that eliminating the tip credit will work in Montgomery and Prince George’s counties because she says implementation of Initiative 82 in D.C. has been “amazing.” Problems around implementation are getting quickly resolved, she adds, pointing to an agreement between D.C.’s Office of the Attorney General and the Restaurant Association Metropolitan Washington on how restaurants can add a service charge in a transparent way that complies with local consumer protection law. She says One Fair Wage will focus on Virginia after local elections because the race outcomes will determine its likelihood.

“I think the proof is in the pudding that workers are getting up and walking over from Prince George’s and Montgomery County to get jobs in D.C., where they can get double the wage,” Jayaraman tells DCist/WAMU. “That is why there’s urgency to get this done in Maryland.”