Next, examine the restaurant’s actual revenue. It’s much less than you think. That’s why they constantly go out of business. Few industries have a higher failure rate than full-service restaurants.
Third, determine who is likely to pay the large salary increases caused by the repeal of the tipped minimum wage. That goes to guests in the form of service charges and higher menu prices. Restaurant profits cannot absorb increased labor costs.
Fourth, find voters who will be happy about this change. In Washington, DC, guests are confused by service charges and rate increases. Restaurant owners are struggling to manage declining revenues. A tipped employee’s income does not increase. Of course, the D.C. Department of Taxation and Revenue is happy. Additional sales tax is collected on all service charges.
Voters in Washington, D.C., were given a choice on a ballot initiative to save or eliminate the tipped minimum wage. More than 75% voted for repeal without fully understanding it. Will Maryland follow suit, or will voters do their homework?
Jeffrey Tracy, Washington
The author is the owner of Chef Jeff’s Restaurant and Leah’s Restaurant.