Maryland lawmakers gave final approval Thursday to a law that gradually increases the state’s minimum wage to $15 per hour, from the current rate of $10.10. Here are details of how the law will work.
Wait, I thought the governor vetoed the bill?
You’re right. Gov. Larry Hogan did veto the bill on Wednesday, saying that a mandated increase in the minimum wage would make Maryland less competitive and could cause low-wage workers to lose their jobs.
But less than 24 hours later, the Democratic-majority General Assembly overrode the vetoes, which makes the bills become law.
When will the minimum wage go up?
The first increase will be required Jan. 1, 2020, bringing the minimum wage to $11 per hour.
After that, the increases are different, based on the size of the employer.
For companies with at least 15 employees, this is the schedule of increases:
» $11 on Jan. 1, 2020
» $11.75 on Jan. 1, 2021
» $12.50 on Jan. 1, 2022
» $13.25 on Jan. 1, 2023
» $14 on Jan. 1, 2024
» $15 on Jan. 1, 2025
For companies with fewer than 15 employees, this is the schedule of increases:
» $11 on Jan. 1, 2020
» $11.60 on Jan. 1, 2021
» $12.20 on Jan. 1, 2022
» $12.80 on Jan. 1, 2023
» $13.40 on Jan. 1, 2024
» $14.00 on Jan. 1, 2025
» $14.60 on Jan. 1, 2026
» $15 on July 1, 2026
What about servers and bartenders?
The final version of the law keeps everything the same for tipped employees such as servers and bartenders.
Tipped employees can be paid as little as $3.63 per hour in base pay, which is half of the federal minimum wage of $7.25.
For tipped workers, the base pay and tips must combine to meet or exceed the state minimum wage. If they do not, the employer must make up the difference to ensure the worker earns minimum wage. This is known as the “tip credit.”
The law includes a requirement for companies with tipped employees to provide a report to their workers showing how much they earn between base pay and tips. The original bill would have gradually eliminated the tip credit and brought tipped workers up to $15, but that was taken out of the bill before it was passed.
Are there other exceptions?
Companies that hire workers younger than 18 will be allowed to pay them 85 percent of the minimum wage.
That replaces the current law, that allows companies to pay an 85 percent wage to workers younger than 20 for the first six months on the job, or for employees who work for certain seasonal amusement and recreational businesses, including swimming pools.
Is there any way to block the minimum wage increases?
Sort of. Between 2020 and 2026, there is a one-time opportunity for the state to delay the next increase based on certain employment indicators.
The Board of Public Works — composed of the governor, comptroller and treasurer — could order a suspension of the next scheduled minimum wage increase if there is negative employment growth, as measured by certain federal government data.
The Board of Public Works could do that only once during the phase-in of the minimum wage increases.
What about the organizations that help people with disabilities?
A number of health and human service organizations asked for more state funding, because they were concerned that they can’t afford to increase the pay of their workers. Organizations that help Marylanders with disabilities were particularly concerned that their workers would be left behind.
The law, as passed, requires the governor to put certain funding increases for those organizations in future budgets.
The organizations that will get the increases include those that serve people with disabilities, mental illness, substance abuse and the elderly.
Didn’t Maryland just increase the minimum wage?
Yes — Maryland’s minimum wage reached the current level of $10.10 last summer. That was the last installment of a multiyear increase that was approved in 2014.
Is Maryland the only state with a minimum wage this high?
All states must follow at least the federal minimum wage, currently set at $7.25 per hour, but many have increased their own minimum wage.
California, the District of Columbia, Illinois, Massachusetts, New Jersey and New York have passed laws mandating increases to eventually bring the minimum wage to $15, according to the National Conference of State Legislatures.
The District of Columbia’s minimum wage is $13.25, going up to $14 this summer and $15 next summer.
Aside from the District of Columbia, the other states surrounding Maryland have lower wages: $7.25 in Virginia and Pennsylvania, $8.75 West Virginia and $8.75 in Delaware, with an increase to $9.25 scheduled to this fall.