Maryland's minimum wage could get a boost under a proposed bill aimed at protecting workers

Maryland lawmakers, labor advocates and tipped workers shared support during a rally Wednesday for a proposed bill that could raise Maryland's minimum wage to $20 per hour. 

If passed, the No Tax on Tips Act would phase in the minimum wage increase by 2027 and strengthen wage theft enforcement. 

The bill would also establish consumer protections for service fees that restaurants charge. 

The proposed bill dictates that restaurants and other food service locations would not be able to charge a service fee unless the facility discloses the fee to the customer on the menu or in another visible location before an order is placed. 

The restaurant would have to clarify what the service fee is for and if it is paid directly to employees in addition to wages. Violations of the rule would be considered as an unfair or deceptive practice, warranting penalties. 

Under the proposed bill, employers would have to pay each employee either the federal minimum wage or the state minimum wage. Subminimum wages for tipped workers would be eliminated.

As of January 2024, Maryland's minimum wage is $15 and is not scheduled to increase in 2025. 

The bill would increase the state's minimum wage to $17 per hour by January 2027 and to $18.50 by January 2028. In July 2028, the minimum wage would increase to $20 per hour under the bill. 

If an employee is under 18 years old, an employer would be allowed to pay them 85% of the state's minimum wage. 

Under the bill, certain employers who hire tipped workers would not be allowed to include a tip amount as part of the employees' wages. 

The bill would exempt tips from being taxed and would offer tax credits for small businesses. 

Under the bill, an employer would be allowed to pay their employees an amount that represents the tips an employee usually receives. The tip credit amount cannot exceed the minimum wage for the employee. 

If the bill passes, starting in July 2028, employers would not be allowed to include the tip credit as part of the employee's wage and would be required to pay the employee the state's minimum wage. 

The bill does not prevent employers from paying tips to employees.

Unions support the No Tax on Tips Act

During Wednesday's rally, advocates called on lawmakers to pass the bill, ensuring workers in Maryland are paid fairly and tipped workers have protections against wage theft. 

According to the group, five major labor unions have shared their support for the bill, including the Maryland State Education Association (MSEA).

Advocates pointed to a poll conducted by Fred Yang of Hart Research Associates that revealed 72% of Maryland voters and 81% of unlikely voters support raising the minimum wage to $20 an hour and eliminating the subminimum wage for tipped workers. 

The poll also showed that 78% of voters cited the rising cost of living as their reason for supporting the legislation. 

The bill had a hearing in the state Senate Wednesday.