Minimum Wage Requirements in Maryland 2024

Overview of Maryland's Minimum Wage Requirements

As of January 1, 2024, the minimum wage in the state of Maryland has seen a significant increase. The General Assembly's Fair Wage Act of 2023 has raised the minimum wage from $13.25 to $15.00 per hour. This change applies to both employers with 15 or more employees and those with 14 or fewer employees. The federally-mandated minimum wage, however, remains at $7.25 per hour.

The Fair Wage Act of 2023 was a response to the unexpected increase in inflation and cost-of-living since the previous minimum wage law was passed in 2019. The 2019 law had planned for the minimum wage to reach $15.00 per hour by 2025. However, between 2019 and 2022, prices rose almost twice as fast as originally anticipated, making the goal outdated. The new Act ensures that the intention of the 2019 law is carried out, despite the unforeseen economic changes.

Understanding Local Minimum Wage Variations

In Maryland, local minimum wage requirements vary based on the size of the employer and the county. For instance, in Montgomery County, large employers with 51 or more employees must pay a minimum wage of $16.70 per hour. Mid-sized employers with 11 to 50 employees, and small employers with 10 or fewer employees, must pay a minimum wage of $15.00 per hour.

In Howard County, the minimum wage for general employers is $15.00, effective from January 1, 2023. For small employers, the minimum wage is also $15.00, effective from January 1, 2024. However, the Howard County Government will raise its minimum wage to $16.00 on July 1, 2024.

Minimum Wage Eligibility and Exemptions

In the state of Maryland, the minimum wage is set at $15.00 per hour for all employers, effective from January 1, 2024. However, there are exemptions to the minimum wage requirement. Employees who are not entitled to the Maryland minimum wage include immediate family members of the employer, certain agricultural employees, executives, administrative, and professional employees, volunteers for educational, charitable, religious, and non-profit organizations, and employees under 16 working less than 20 hours per week.

Employers can pay employees who are under 18 years old at a minimum wage rate of 85% of the state minimum wage. Employers may pay “tipped employees” a lower wage, not less than $3.63 per hour in most of the state. An employer can only pay this tipped minimum wage where the employee earns enough in tips to bring his or her average hourly wage to the state minimum wage. Employers must supplement any deficiencies to bring the employee to the minimum wage level.

Minimum Wage Considerations and Compliance Tips

As a food business employer in Maryland, it's critical to understand the key minimum wage legal and compliance considerations to ensure fair treatment of your employees and avoid potential legal issues. For tipped employees who earn more than $30 per month in tips, employers must pay at least $3.63 per hour. The total of this amount plus tips must equal at least the State Minimum Wage Rate. If you utilize a tip credit, you are required to provide employees with a wage statement for each pay period showing the employee’s effective hourly rate of pay, including employer-paid cash wages plus tips.

In addition, employers can apply a maximum tip credit of $11.37 against the minimum wage. This means the minimum cash wage that employers are required to pay tipped employees is $3.63. Employers must ensure that the combined amount the employee receives from the employer and in tips meets or exceeds the basic combined cash and tip minimum wage rate. If you utilize a tip credit, you must provide your employees with a tip credit wage statement. This statement can be written or electronic and should include the hours worked, the rate of employer-paid cash wages, reported tips, and any other information used to calculate the effective hourly rate. These records should be retained for at least three years.

FAQs

• What is the current minimum wage in Maryland? As of January 1, 2024, the minimum wage in Maryland is $15.00 per hour for all employers.
• Are there any exemptions to the minimum wage in Maryland? Yes, there are several exemptions, including for immediate family members of the employer, certain agricultural employees, executives, administrative, and professional employees, and volunteers for educational, charitable, religious, and non-profit organizations.
• What is the minimum wage for tipped employees in Maryland? Employers must pay tipped employees at least $3.63 per hour. However, the total earnings, including tips, must at least equal the State Minimum Wage Rate of $15.00 per hour.

Information Source Links

• Maryland Department of Labor
• Montgomery County Office of Human Rights
• Maryland General Assembly
• U.S. Department of Labor
• People's Law Library of Maryland

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