On Tuesday, Del. Adrian Boafo joined One Fair Wage activists in Annapolis to promote legislation that would raise Maryland’s minimum wage to $25 an hour while eliminating the tip credit altogether. They say the public supports the legislation, but it doesn’t sound like they asked local tipped workers if they want the proposed changes to their pay.
Maryland’s current system allows tipped restaurant workers to earn a base wage of $3.63 per hour plus tips to earn at least the state’s existing hourly $15 mandate. Boafo’s proposal to eliminate this difference, which is called a “tip credit,” would raise the base wage by over 500% in just a few years. To absorb this massive hike, restaurant employers would likely be forced to make various changes – including menu price increases, reducing staff hours, or cutting positions entirely.
This type of policy has already been tested, and the results should give lawmakers pause.
Surveyed Tipped Workers Overwhelmingly Oppose Eliminating Maryland’s Tip Credit
A survey of tipped restaurant workers in Del. Boafo’s district shows they have serious concerns about how tip credit elimination would affect their livelihoods:
- 86% say they prefer the current tip credit system over a flat wage alternative;
- 89% say they will earn less if the tip credit is eliminated; and
- 80% say they would quit their jobs and work elsewhere if the tip credit were eliminated.
Historically, Maryland Tipped Workers Reject Tip Credit Elimination
Maryland has already tried to enact tip credit elimination before, and lawmakers have consistently rejected it after hearing directly from local tipped workers. Servers, bartenders, and tipped employees across the state have explained that the current system allows them to earn well above the standard minimum wage. They also warned that replacing tips with a flat wage would reduce earnings, limit flexibility, and shrink job opportunities in an industry built on customer demand and narrow margins.
That’s why over the last five years, state and local attempts to eliminate the tip credit have failed. Even in Del. Boafo’s own district, Prince George’s County unanimously voted to scrap a proposal to eliminate the tip credit after hearing from employees.
Neighboring DC Walked Back Tip Credit Elimination Law After Losses
The most recent example sits just across the border in Washington, D.C., where voters approved Initiative 82, a One Fair Wage-backed proposal to eliminate the tip credit while imposing a significantly higher wage floor for tipped employees.
The outcome was swift and damaging. Thousands of tipped restaurant workers lost their jobs, accounting for roughly 5% of the city’s restaurant workforce. In total, workers lost roughly $11.8 million in earnings as tipping fell and customer traffic slowed. Restaurant closures increased year after year under Initiative 82, reaching levels not seen since the height of the pandemic.
The policy proved so disruptive that the D.C. City Council ultimately intervened to halt its implementation.
Despite that record, national activists are now urging Maryland lawmakers to pursue the same approach.
At a time when restaurants are still grappling with higher costs, softer foot traffic, and lingering post-pandemic pressures, Maryland should not gamble on a policy that has already failed elsewhere. The experience in Washington, D.C., offers a clear warning, and Maryland’s own legislative history reinforces it.