OCEAN CITY — For an industry already struggling because of the ongoing pandemic, a proposed increase in the federal minimum wage and the elimination of the tip credit could signal the end for many restaurants.
Part of the Biden Administration’s proposed and fiercely-debated next federal COVID-19 stimulus package is the Raise the Wage Act, which includes a gradual increase in the federal minimum wage from $7.25 per hour to $15 per hour and the elimination of the tip credit. As its name suggests, the tip credit is a means by which hospitality industry business owners ensure tipped employees earn the mandated minimum wage.
Few would dispute the benefits of a mandated increase in the federal minimum wage for hospitality workers struggling in the midst of the ongoing pandemic, but the associated elimination of the tip credit could signal the death knell for many businesses. It’s complicated, but in layman’s terms, the tip credit allows employers to count employee tips as a portion of the minimum wage.
In simplest terms, if an employee earns $4 per hour on the clock, but makes $20 per hour in tips, the employer is responsibly for only paying the $4 for a total of $24. However, if the tip credit was eliminated, the employer would have to pay that same employee the mandated $15 per hour.
Typical Josef Stolen policy: every real person loses. Owner, employee, customer. Only the Government benefits, from higher taxes.
Hi, Molly. Uh, NO. Pandering to criminals is not my bag, but good luck in your endeavors. May the peace of Antifa and BLM be with you.
I simply won’t tip.
Hey Steve Green…where the hell was this report (from Sloper) when the $15 crap was originally done via Feds and State? Why now before the season starts? We in the business warned of this all the way to Annapolis, to no avail. Is that why City Fail thru sh*t on the wall considering bringing in folks from Puerto Rico (americans) as a backup to the backup to no J1s? Theres a story needing more investigation. We thought troubles with no J1s and covid this past year was bad…….this $15 min wage was already on the horizon.
Well we all know, increased wages get pushed to the customer. If there is no customer, there is no revenue. No revenue, no business…no business, not tax revenue….well wonder what City Fails backup to the backup to the backup will be?
Oh yeah, raising hotel tax rates, rent tax rates which increases room/rent rates and who hurts? Customers who we NEED.
November 2022.