Maryland Del. Adrian Boafo(D-Prince George’s) is hoping President Donald Trump’s popular no-tax-on-tips policy will help Maryland eliminate the tip credit for restaurant workers. Proposed bills in the Maryland General Assembly would end the existing tip credit system, which currently requires restaurants to make up the difference if an employee’s base wage and tips fall below the regular minimum wage. Instead, it would raise the base wage for servers and bartenders more than 300 percent.
The problem is, Maryland workers have continually told lawmakers that tip-credit elimination isn’t something they want. In three subsequent legislative sessions, hundreds of local servers and bartenders testified that proposals to eliminate the tip credit would hurt their jobs and take-home pay by encouraging restaurants to raise prices. Similar proposals failed in Prince George’s and Montgomery counties.
Perhaps the clearest evidence that Maryland should steer clear of the policy comes from D.C.
Since the District implemented Initiative 82 in 2023, eliminating the tip credit, research conducted by my organization suggests that full-service restaurants swiftly made changes, cutting as many as 4,000 jobs. We found that, in 2024, full-service restaurant jobs were down 2 percent or more every month compared with 2023.
At a D.C. Council hearing last month, dozens of tipped workers testified against eliminating the city’s tip credit. One server told council members her average tips dropped from as much as 25 percent per bill to as little as 18 percent per bill. Some workers said they are now making as much as 50 percent less than they did before the law’s passage. Still others cited data showing the city’s restaurants are closing at the highest rate since the pandemic. One worker told council members that she could go to Maryland and earn double for the same amount of work.
The data is clear: This isn’t just an economic issue; it’s a livelihood issue. Though activist organizations promised higher wages, the reality is that workers lose out with fewer jobs, reduced hours and lower tips.