The Baltimore restaurant industry is preparing for a potential fight against an out-of-town nonprofit's effort to implement a fair minimum wage mandate for service workers in Maryland.
Sara Jayaraman, co-founder and spokesperson for the New York City-based advocacy group One Fair Wage said her nonprofit will bring its mandatory minimum wage fight to the local level.
Jayaraman said the current U.S. tipping structure relies on service workers earning a lower minimum wage, which is supplemented by tips to help them reach a recognized minimum wage. She said this system is rooted in systematic racism. One Fair Wage's website echoes this claim.
"The sector's low wages are due to the money, power and influence of a trade lobby called the National Restaurant Association ('The Other NRA') which has lobbied since Emancipation to maintain a subminimum wage for tipped workers -- a literal legacy of slavery," One Fair Wage's website says.
The National Restaurant Association's website says it was established on March 13, 1919, by Kansas City restaurateurs. Former President Abraham Lincoln signed the Emancipation Proclamation on January 1, 1863, according to the National Archives.
Ron and Gail Furman, who have owned Max's Taphouse in Fells Point for 39 years, said they believe Jayaraman's advocacy work is misguided.
"People aren't going to pay it," she added.
In 2022, Washington, D.C. voters approved a ballot measure supported by One Fair Wage known as Initiative 82. The measure mandated restaurants gradually eliminate the lower tipped wage over several years, ultimately reaching the city's current minimum wage of $17.50.
Consumer advocacy groups in Washington, D.C., have targeted restaurant owners because many establishments have been forced to add a 20% service fee to diners' bills. Restauranteurs have insisted the increase is necessary to offset the nearly 300% rise in operating expenses to pay higher wages.
In March, the D.C. Council codified restaurants' ability to charge up to 20% service fees to offset the expense increase. These service fees were not considered tips for service for restaurant workers.
Data from the U.S. Bureau of Labor and Statistics shows the restaurant industry in Washington, D.C., lost nearly 1,800 jobs amid the phased implementation of the mandatory wage increase law. Those jobs have not yet been recovered, the data shows.
Jayaraman said her organization's data offers a different perspective, arguing the quality of life for restaurant workers has improved.
"Things are exactly what they were before in terms of consumers, in terms of employers; and, workers are getting more than they got before," Jayaraman said. "But let's be clear: I-82, for all of the screaming, has only been two years into a five-year phase-in."
Tim Christofield, a longtime bartender at Furman's restaurant, said that if the Baltimore City Council moves forward with a bill like one passed in Washington, D.C., he will have to leave a career he loves.
"They think there is a gray area where they think we are not declaring [taxes] or there is something that isn't being reported properly," Christofield said. "They want to seize control over that and that's just pretty ridiculous."
Ron Furman said his family and their employees believe One Fair Wage's efforts represent a fabricated issue seeking a solution aimed at increasing tax revenue for the city. They argue the initiative attempts to close a loophole that his employees do not exploit.
"None of our employees make $3.63 an hour. None of our employees make $15 an hour," Ron Furman said. "They make a lot more than that because they earn it and they do a great job doing what they do."
"[I]f the customers are coming in and seeing a 15-20% surcharge on their bill, and [our employees are] not going to be earning tips, they are not going to stay," he added.
Baltimore City Council members John Bullock, Ryan Dorsey, Kristerfer Burnett, Odette Ramos and Phylicia Porter proposed a bill in June that would have required city restaurants to eliminate their tip credit system and implement a phased mandatory minimum wage of $15 per hour. The bill did not receive a vote before the previous council's term ended.
FOX45 reached out to each of the re-elected council members who previously proposed the wage mandate. Councilman Bullock acknowledged the message but did not say if he plans to reintroduce the measure.
In a statement, the Restaurant Association of Maryland said it "strongly opposes" so-called fair wage efforts, claiming such policies have a negative impact on employees, restaurants and customers.
"Legislation to eliminate the tip credit is being pushed by an out-of-state activist group as part of their nationwide agenda," the Restaurant Association of Maryland wrote. "Maryland elected officials should reject that group's efforts to pursue their agenda at the expense of local restaurants and tipped employees who support maintaining the tip credit."