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.
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.
Within Maryland, Montgomery and Prince George’s counties previously approved their own minimum wage increases. Montgomery’s wage is $12.25 for companies with more than 50 employees and $12 for smaller companies. Prince George’s County’s minimum wage is currently $11.50.