Maryland joined the parade of states raising the minimum wage to the magic number of $15 per hour when the state legislature voted to override the veto of Governor Larry Hogan on March 28, 2019. The minimum wage for employers with 15 or more employees will increase annually commencing January 1, 2020 until it reaches the $15 per hour level on January 1, 2025. The minimum wage for smaller employers will increase annually at a slower pace, and reach $15 on July 1, 2026. The initial increase for all employers effective January 1, 2020 raises the minimum wage to $11 per hour from the current $10.10.
Maryland thus joins California, New York, Massachusetts, Illinois, New Jersey and the District of Columbia in moving to the $15 minimum wage. Some municipalities, such as Seattle, have also adopted this wage minimum. In Maryland, Montgomery and Prince George’s counties have established higher local minimum wages.
As originally drafted, the bill would have eliminated the tip credit for hospitality workers. However, these provisions were removed from the legislation. The new law directs the Commissioner of the Division of Labor and Industry to promulgate regulations requiring employers using the tip credit to provide tipped employees with a written or electronic wage statement for each pay period that shows the “effective hourly tip rate” as derived from “employer-paid cash wages plus all reported tips” for tip credit hours worked each workweek of the pay period. The bill takes effect on June 1, 2019, although it will presumably take some time for the Commissioner to issue these regulations.
If you have any questions regarding the new law or other labor or employment issues, please feel free to contact the author of this Alert, Jay Fries, jfries@fordharrison.com, who is a partner in our Baltimore and Tysons Corner offices. Of course, you may also contact the FordHarrison attorney with whom you usually work.