Maryland Joins Growing List of States Increasing Statewide Minimum Wage to $15 Per Hour

On March 28, 2019, Maryland lawmakers passed an increase in the state minimum wage to $15 per hour starting January 1, 2025.  Governor Larry Hogan had vetoed this bill when it originally crossed his desk on Wednesday the 27th, saying that it would negatively affect Maryland’s economy and might cost the state jobs.  But the state legislature overrode his veto the next day.1 With that gubernatorial override, Maryland has become the sixth state to pass a statewide increase in the minimum wage to $15 per hour, joining California, Illinois, New Jersey, New York, and Massachusetts.

The Maryland bill, H.B. 166/S.B. 280, is a large budget measure with several sections related to the state minimum wage. The measure provides that employers must pay employees the higher of either the federally mandated minimum wage or the state minimum wage, unless employees are subject to a training wage to be set by the state Commissioner of Labor and Industry and allowed under the federal Fair Labor Standards Act. The current Maryland minimum wage is $10.10 per hour, but will rise to $11.00 per hour on January 1, 2020. After that, the minimum wage will increase by $0.75 each January 1, until it reaches $15 per hour on January 1, 2025. Small employers, defined as companies with 14 or fewer employees, will have a slightly slower rate of minimum wage increases with only $0.60 per-hour raises each January 1 through January of 2026. The applicable minimum wage for small businesses, therefore, will not reach $15 per hour until July 1, 2026.

Other provisions in this bill allow for the Board of Public Works to analyze the seasonal employment statistics by or on October 1, 2020 and again every October 1 to compare job totals to the previous year.  If the employment statistics show a downward trend, the Board is authorized to suspend the increase in the minimum wage rate.  The Board can also use state revenues to determine whether the minimum wage increase should be temporarily suspended.  Also, the bill does preserve a lower minimum wage for workers under age 18, previously set at age 20, with hourly wages of 85% of the state minimum wage.

In addition, businesses that employ customarily tipped workers and that include a tip credit are required to provide employees with a wage statement each pay period detailing their effective hourly tip rate.  The Commissioner of the Department of Labor, Licensing, and Regulation is required to adopt regulations in consultation with the Payroll Service Providers and Restaurant Industry Trade Group Representatives, and provide notification of the final tip credit wage statement regulations on its website.  

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Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.