What to Know About the Maryland Minimum Wage Increase
Beginning on January 1st, 2020, the Maryland minimum wage will be increasing from the current $10.10 per hour to $11 per hour as part of the years-long process of increasing the minimum wage to $15. If you are curious as to why this change is happening, or how this will affect various common types of businesses and employees, read our handy guide below that illustrates the facts you need to know about the new Maryland minimum wage.
What Is Minimum Wage?
The minimum wage is the lowest legal amount an employee can make per hour. The federal government institutes a federal minimum wage of $7.25, but each state can raise the minimum wage within their state, as long as it is at least $7.25. The federal minimum wage provisions were contained in the Fair Labor Standards Act (FLSA), which also outlines overtime wage laws.
Why Is the Maryland Minimum Wage Increasing?
In March, the Maryland General Assembly overturned a gubernatorial veto to pass a bill, which will gradually increase the state’s minimum wage to $15 per hour. The first increase is occurring this upcoming January of 2020, with companies of more than and less than 15 employees moving their minimum wage to $11. After 2020, the increase rate will vary depending on the size of the company.
How The Maryland Minimum Wage Increase Applies to Different Businesses
Over 15 Employees
For companies with at least 15 employees, the minimum wage increase schedule is planned to be the following, with every wage increase going into effect on January 1st of that year:
- $11 for 2020
- $11.75 for 2021
- $12.50 for 2022
- $13.25 for 2023
- $14 for 2024
- $15 for 2025
Under 15 Employees
For companies with fewer than 15 employees, the minimum wage increase is scheduled to increase in the following installments:
- $11 for 2020
- $11.60 for 2021
- $12.20 for 2022
- $12.80 for 2023
- $13.40 for 2024
- $14 for 2025
- $14.60 for 2026
- $15 on July 1st, 2026
How the Maryland Minimum Wage Applies to Specific Employees
Servers and Bartenders
The final version of the new Maryland minimum wage law keeps the laws the same for tipped employees, such as servers and bartenders. Tipped employees can be paid a base pay as low as $3.63 per hour, but their tips combined with base pay must meet or exceed the state minimum wage. If they do not, the employer must make up the difference to ensure the employee earns the minimum wage.
Workers Younger Than 18
Companies with employees younger than 18 will be allowed to pay them 85% of the state minimum wage. This will replace the current law, which allows companies with employees younger than 20 to pay them 85% of the minimum wage for their first six months.
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