Maryland’s Minimum Wage Increase: What You Need to Know

What does this increase entail?

Effective January 1, 2020, Maryland employers will be required to begin increasing the minimum wage to $15.00, which will occur over the span of multiple years. Similarly, six other states have recently implemented minimum wage increases: California, Illinois, Massachusetts, New Jersey, and New York. Although the federal minimum wage is currently $7.25, Maryland businesses must abide by the minimum wage regulations within their state.

Businesses with fifteen employees or more are legally obligated to complete the transition to $15.00 an hour by January 1, 2025. Small businesses with under fifteen employees are obligated to meet the $15.00 minimum by July 1, 2026. There are specific yearly increases; for example, companies with under fifteen employees must pay a minimum of $11.60 by January 1, 2021, and companies with over fifteen employees must pay a minimum of $11.75 by January 1, 2021.

Are there exceptions?

 There are exceptions to Maryland’s minimum wage increase, namely in regard to age and industry. Specific industries, such as the amusement and agriculture sectors, are exempt from implementing the new minimum wage. As per regulation passed in June of 2019, those under the age of 18 are not legally required to earn the full minimum wage but must earn 85% or more of the minimum.

It is also important to note that Montgomery County and Prince George’s County abide by their own particular set of minimum wage requirements. In Montgomery County, businesses with over 50 employees are currently required to pay their employees a minimum of $13.00 hourly, with smaller businesses (under 51 employees) must pay their employees a minimum $12.50 per hour. These minimums will increase effective July 1, 2020. Prince George’s County, on the other hand, will continue to enforce a minimum wage of $11.50 for all businesses until the end of this year.

What does this mean for my small business?

Maryland small business owners are urged to keep all legal regulations in mind while operating their business. Failure to do so can put your business on the line and amplify your potential to face legal repercussions. It is best to consult a business professional with specific questions or uncertainties, as circumstances vary case-by-case.

When it comes to small business matters, a helping hand can make a huge difference. For assistance with Maryland small business formation, or with your existing small business, we invite you to contact the Law Offices of Elsa W. Smith, LLC at 410-995-7719.