Employment Law Update

Minimum Wage Increases For Maryland Workers

Currently, the minimum wage employers are required to pay is the same ($7.25/hr) under both federal and Maryland law. The Maryland General Assembly amended the state’s Wage and Hour Law to raise the minimum wage above the current federally mandated level. The new law, which becomes effective on January 1, 2015, will require employers to begin phasing-in a higher minimum wage over the next four years as follows:

• on January 1, 2015, $8.00 per hour
• on July 1, 2015, $8.25 per hour
• on July 1, 2016, $8.75 per hour
• on July 1, 2017, $9.25 per hour; and
• on July 1, 2018, $10.10 per hour.

Counties May Set Their Own Higher Minimum Wage

Charter counties may establish a local minimum wage rate higher than the State minimum wage rate. Montgomery County and Prince George’s County have already passed local minimum wage increases. In both counties the new minimum wage will be phased in over four years. The rate will be $8.40 per hour on Oct. 1, 2014, $9.55 per hour on Oct 1, 2015, $10.75 per hour on Oct. 1, 2016, and $11.50 per hour on Oct. 1, 2017.

Other Changes To Minimum Wage and State Overtime Requirements

The amendment creates a training rate that will allow employers to pay a wage equal to 85% of the state minimum wage to an employee who is under the age of 20 years for the first six months of employment. In addition, amusement and recreational employers may, under certain conditions, pay a wage that equals the greater of $7.25 or 85% of the State minimum wage.

Existing exemptions from the minimum wage law were repealed for individuals who are at least 62 years old and employed no more than 25 hours a week, and for motion picture theater employees. The new law also repeals provisions exempting certain employers, such as hotels, restaurants, gas stations, private country clubs, and certain not-for-profit entities that provide temporary at-home care to aged or sick individuals or the disabled from overtime requirements; which brings the Maryland statute into line with the federal wage and hour law.

The “Tip Credit” Increases With the Minimum Wage

Under the amended law, the base wage for “tipped employees” is set at $3.63 per hour. Employers are required to make up any difference if a tipped employee’s base wage plus tips falls short of the minimum wage.

Penalties for Non-Compliance

If an employer pays a worker less than the required minimum wage, an employee may recover the difference between the wage paid and the wage required, plus an additional equal amount as liquidated damages unless the employer can establish that it acted in good faith and reasonably believed that the wages paid were not less than the minimum wage. An employee is also entitled to recover attorney’s fees and other costs.

If you have any questions regarding the new minimum wage law, please contact Chuck Bacharach, 410-576-4169; or Bob Kellner, 410-576-4239.