Why Senate Bill 803 is Groundbreaking Legislation for Financial Equity

By: Jennifer Mendes Dwyer, Deputy Executive Director at Progressive Maryland

The phase out of the subminimum wage for tipped workers is an important step in ending a legacy of slavery and achieving economic equality for low-income and women workers. This legislation is essential to improving living standards for these individuals, as it eliminates their dependence on tips to make ends meet.

Most low-income and women workers rely heavily on tips to earn a livable wage. With the current tipped minimum wage at only $3.63 per hour, they often receive far less than the regular minimum wage of $13.25, leaving them with inadequate wages to cover basic life expenses such as food, gas, and rent. Additionally, due to the biased nature of tipping culture, these workers disproportionately receive lower wages than similarly-qualified male workers. This disparity can leave them facing poverty even when working full time hours. In addition, because tips make up such a large percentage of their income, women who rely on tips are often forced to put up with mistreatment from customers, including sexual harassment, just to ensure that they get a paycheck at the end of their work day.

Phasing out the sub minimum wage for tipped workers would provide these vulnerable workers with greater financial security by ensuring that they are paid at least a livable wage every hour, regardless of whether or not they receive tips from customers. All workers deserve a minimum wage, with tips on top as a bonus, and not as a part of the wage. This would lift thousands out of poverty and create a more equitable system where everyone is paid fairly for their time and effort without having to depend on unreliable income sources such as tips. Additionally, this bill would help promote gender equality by reducing pay disparities between men and women in traditionally female-dominated industries such as hospitality and food service, making it easier for them to fulfill their financial obligations without relying solely on gratuities from customers. Gratuities should be a bonus for a good service, not a customer subsidy to employers for their wage bills.

By phasing out the sub minimum wage for tipped workers and replacing it with a fair livable wage rate determined by Maryland's Department of Labor, this bill will ensure economic stability for countless workers across the state who currently struggle under outdated labor laws that do not reflect today's reality.

Progressive Maryland is dedicated to pushing for SB803 to pass One Fair Wage, i.e. a full wage with tips on top. This will create a fairer economy where no worker ever has to worry about being unable to afford basic necessities again due to unfair wages or inequality based on gender and race.