Administration Minimum Wage Bill: $10.10 By 2016

The Maryland Minimum Wage Act of 2014 is the Administration’s legislative proposal on minimum wage, and, as such, demands the most attention of any proposal on the subject this year.  About a week ago, the Governor announced his support for raising the minimum wage from its current $7.25 to $10.10 with automatic increases to keep rate with inflation at a rally in Annapolis.  HB295 reveals the details of his idea.

A change in the minimum wage could negatively affect county budgets by increasing wages for part-time, contractual, and salaried employees, and by increasing the cost of procured contract services.  In addition, two Maryland counties recently passed local laws to raise the minimum wage in their jurisdictions.  MACo is monitoring state legislative action on minimum wage for its impact on county budgets and local laws.

The Maryland Minimum Wage Act of 2014 would raise the minimum wage to $10.10 by 2016, and tie future increases to the Consumer Price Index.  The Act also extends application of the minimum wage law to include categories of workers that are exempt from the current law, including employees who are over 62 years of age and working less than 25 hours per week,  or employees at a cafes, drive–ins, drugstores, restaurants, and taverns that have annual gross incomes of less than $250,000.

The Act limits tip credit allowances to for tipped employees, so that employers may deduct no more than 30% of the minimum wage from their pay.  It expands the types of employers who must pay overtime, and lowers the hours per week that certain employees may work before qualifying for overtime from 60 to 48 hours per week.  Finally, the Act allows employees to recover additional damages when they bring an action against an employer for failure to pay the minimum wage.

Under this legislation, “governmental units” including county governments will be subject to the new minimum wage law.  There is no special language in the legislation regarding the authority of county governments to set their own minimum wages.  For more information, read the full text of The Maryland Minimum Wage Act of 2014.