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Latest News - March 2013

March 1, 2013
Businesses, labor square off over minimum wage and sick leave bills
Source: Capital Gazette
By: Rachael Pacella,

Anthony Clarke looks ahead and sees more machines and fewer employees.

Clarke, the owner of Annapolis’ Galway Bay Irish Pub, said a proposal to raise Maryland’s minimum wage by $2.75 per hour by summer 2015 will push businesses to “innovate” with technologies like self-checkouts, reducing the need for workers.

He said a bill debated this week in the State House to boost the minimum wage to $10 will cost him $100,000 annually when fully implemented.

If that happens, he said, restaurants and other business owners will rely more on technology — and small business owners will fall behind.

“You have chains right now that are already testing iPads at your table,” Clarke said. “You’re not helping Maryland by doing this. You’re not helping small businesses stay alive. ... You have nowhere to turn but to increase the price to the consumer.”

Bills that could dramatically impact business bottom lines were debated Wednesday during a House Economic Matters Committee meeting. The committee heard from business owners and workers on bills designed to boost wages and benefits for employees.

In addition to minimum wage legislation, the committee heard testimony on the Maryland Earned Sick and Safe Leave Act, which would force employers to provide one hour of sick leave for every 30 hours worked.

Employers argued sick leave and a minimum wage hike could result in closure or staff cuts. The bills were praised by union leaders.

The minimum wage hike bill, House Bill 1204, will hit restaurant owners particularly hard because they will have to pay tipped employees an additional $2.15 per hour this summer.

The bill calls for a three-step increase in the state’s $7.25 per hour minimum wage. By July 1, 2015, the wage would hit $10.

Restaurants would immediately have their state tip credit reduced. The tip credit allows employers to pay tipped employees, such as waiters and waitresses, less than the minimum wage.

Currently employers have to pay their tipped employees 50 percent of the minimum wage ($3.63 an hour). Under the proposal, their tip credit would go down to 30 percent, meaning they would need to pay their tipped employees 70 percent of the new $8.25-an-hour minimum wage, or $5.78 an hour.

Bill sponsor Del. Aisha Braveboy, D-Prince George’s County, argued that if the minimum wage had kept up with inflation it would be about $10 today.

“We have the ability to change the lives of hundreds of thousands of people in Maryland,” Braveboy said.

David Cooper of the Economic Policy Institute said increasing the minimum wage would boost consumer spending and the overall economy.

“Raising the minimum wage would ... put more money in the pockets of workers that are going to go out and spend those dollars right away in their local community,” Cooper said

 

 

 

 


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