Maryland’s Minimum Wage Law, Explained

The Maryland General Assembly this year passed House Bill 166/Senate Bill 280 (Chs. 10 and 11), legislation to phase in an increase in the State minimum wage to $15.00 per hour by January 1, 2025, with a longer phase-in for employers with 14 or fewer employees.

Unless the federal minimum wage is set at a higher rate, the State minimum wage for employers with 15 or more employees is as follows:

• $11.00 per hour as of January 1, 2020;

• $11.75 per hour as of January 1, 2021;

• $12.50 per hour as of January 1, 2022;

• $13.25 per hour as of January 1, 2023;

• $14.00 per hour as of January 1, 2024; and

• $15.00 per hour as of January 1, 2025.

The State minimum wage for an employer that employs 14 or fewer employees is as follows:

• $11.00 per hour as of January 1, 2020;

• $11.60 per hour as of January 1, 2021;

• $12.20 per hour as of January 1, 2022;

• $12.80 per hour as of January 1, 2023;

• $13.40 per hour as of January 1, 2024

• $14.00 per hour as of January 1, 2025;

• $14.60 per hour as of January 1, 2026; and

• $15.00 per hour as of July 1, 2026.

Employers may no longer pay a training wage of 85% of the State minimum wage rate to employees under the age of 20 for the first six months of employment, or to employees who work for seasonal amusement, recreational, or swimming pool establishments. Instead, an employer may pay 85% of the State minimum wage rate to employees under the age of 18.

The Board of Public Works (BPW) may temporarily suspend one scheduled increase in the State minimum wage for one year between October 1, 2020, and October 1, 2024, if it finds that the seasonally adjusted total employment is negative as compared with the previous six-month period. If total adjusted employment is negative, BPW may also consider the recent performance of State revenues in making its determination.

According to the Department of Legislative Services, general fund spending, related to payroll costs and health care provider rate increases, increases over previously expected levels by an estimated $26.7 million in fiscal 2021, $56.5 million in fiscal 2022, $86.9 million in fiscal 2023, and $118.1 million in fiscal 2024.

Effective July 1, 2018, the minimum wage rate for Maryland increased to $10.10 and the minimum wage rates for Montgomery County increased to $12.25 for employers with 51 or more employees and $12.00 for employers with 50 or fewer employees.

Maryland Minimum Wage Rates
$10.10 Effective 7/1/18
$9.25 Effective 7/1/17
$8.75 Effective 7/1/16

(History of Minimum Wage in Maryland)

The Maryland Department of Labor, Licensing, and Regulation (DLLR) provides the following overview:

Most employees must be paid the Maryland State Minimum Wage Rate.

Tipped Employees (earning more than $30 per month in tips): must earn the State Minimum Wage Rate per hour. Employers must pay at least $3.63 per hour. This amount plus tips must equal at least the State Minimum Wage Rate (Maryland Wage and Hour Law: Tip Credit brochure and Allowable Tip Credits For Employees Earning Minimum Wage brochure.

Amusement and Recreational Establishments: must pay employees at least 85% of the State Minimum Wage Rate or $7.25, whichever is higher (Maryland Wage and Hour Amusement and Recreational Establishment Exemptions brochure).

Employees under 20 years of age: must earn at least 85% of the State Minimum Wage Rate for the first 6 months of employment.

Overtime

Most employees must be paid 1.5 times their usual hourly rate for all work over 40 hrs. per week. Exceptions:

  • Bowling establishments, and institutions providing on-premise care (other than hospitals) to the sick, the aged, or individuals with disabilities for all work over 48 hrs. per week
  • Agricultural workers for all work over 60 hrs. per week (Maryland Wage and Hour Agriculture Exemptions brochure)

Exemptions

Minimum Wage and Overtime Exemptions:

  • Certain agricultural employees
  • Executives, administrative, and professional employees
  • Volunteers for educational, charitable, religious, and non-profit organizations
  • Employees under 16 working less than 20 hours per week
  • Outside salesman
  • Commissioned employees
  • Employees enrolled as a trainee as part of a public school special education program
  • Non-administrative employees of organized camps
  • Certain establishments selling food and drink for consumption on the premises grossing less than $400,000 annually
  • Drive-in theaters
  • Establishments engaged in the first canning, packing or freezing of fruits, vegetables, poultry, or seafood

Overtime Only Exemptions
(must earn the State Minimum Wage Rate):

  • Taxicab drivers
  • Certain employees selling/servicing automobiles, farm equipment, trailers, or trucks
  • Non-profit concert promoter, theater, music festival, music pavilion, or theatrical show
  • Employers subject to certain railroad requirements of the U.S. Dept. of Transportation, the Federal Motor Carrier Act, and the Interstate Commerce Commission

Stay tuned to Conduit Street for more information.

Useful Links

Previous Conduit Street Coverage: $15 Minimum Wage Passed as Veto Overridden

HB 166 – Bill History/Process | Final House vote | Final Senate Vote

Download the posters (download Adobe Acrobat for free)

Labor and Employment Article, Title 3, Subtitle 4, Annotated Code of Maryland

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