In latest edition of The Wright Toolbox:
Maryland Minimum Wage to Increase Sooner, All at Once and for All Employers
The Maryland Legislature recently concluded its 2023 session and one of the changes that will become law, once signed by the Governor, which is expected, relates to the State’s minimum wage. With the passage of SB 555, dubbed the “Fair Wage Act,” the State minimum wage rate will increase sooner and for all employers. Under this new law, the minimum wage increases that were previously approved by the Legislature in a prior session and which were scheduled to go into effect over time between 2023 and 2026, with incremental increases depending on employer size, up to the new minimum of $15.00 per hour, will now be accelerated to increase to $15.00 per hour on January 1, 2024. Thus, under existing law the minimum wage rate that was scheduled to increase to $15.00 per hour over the next several years will now increase to the full $15.00 in 2024 for all employers regardless of size. See chart.
Exhibit 1
State Minimum Wages – Current Law and Under the Bill
The Bill repeals the prior existing law language relating to future increases in the minimum wage being tied to the Consumer Price Index. The Bill will also repeal the Board of Public Works authority to temporarily suspend the minimum wage rate. The existing rule that an employer may pay an employee a wage that equals a rate of 85% of the State minimum wage if the employee is under the age of 18 remains unaffected.
The legislative analysis of the Bill notes that local government expenditures are expected to increase, “potentially significantly in some jurisdictions,” in FY 2024 and 2025 to pay additional wages to employees as a result of the new law. The analysis also determined that the Bill will have a “meaningful impact on small business” as the incremental increase over time will now be required sooner and all at once regardless of employer size. If you have any questions regarding this new law, please contact any member of the WCS Labor and Employment practice group.