The Minimum Wage: What You Need to Know if You Own a Business in Maryland
This article doesn’t constitute legal advice. Please consult a lawyer or accountant in your state to learn more about minimum wage legislation as it applies to your business.
As a business owner, you have a lot to keep track of. Customers, inventory, cash flow. And when you start hiring employees, the information you need to know balloons. There are a lot of laws and rules for employers — like the minimum wage you need to pay employees.
To help make that information a little easier to find, we’ve put together this quick guide for Old Line state employers with the latest information on the Maryland minimum wage.
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What is the minimum wage in Maryland?
As business owners know, Maryland’s minimum wage has been gradually increasing over the past few years. On January 1, 2015, the minimum wage increased from $7.25 to $8 an hour, then to $8.25 in July 2015. A year later, in July 2016, it rose to $8.75, then to $9.25 in July 2017, and, finally, to $10.10 an hour in July 2018.
Some employees who are exempt from this minimum wage rate include:
- Tipped employees who earn more than $30 per month in tips must be paid at least $3.63 per hour, and this amount plus tips must equal at least the state minimum wage.
- Employees of amusement and recreational establishments (who meet certain requirements) must be paid at least 85 percent of the state minimum wage or $7.25, whichever is higher.
- Employees under 20 years of age must earn at least 85 percent of the Maryland minimum wage during their first six months of employment.
Keep in mind that counties, cities, and towns may have their own minimum wage laws. For example, in Montgomery County, the minimum wage is now $12.25 for employers with 51 or more employees and $12 for employers with 50 or fewer employees. Be sure to check what local wage laws may apply to you.
Are there plans to change the minimum wage in Maryland?
Maryland legislators in 2014 enacted a plan to gradually raise the state minimum wage, with four increases since 2015 until the hourly rate reached $10.10 in July 2018. There are no other plans in place to change the minimum wage at this time.
What’s happening with the minimum wage beyond 2018 in Maryland?
A bill before the state legislature would raise the minimum wage to $15 per hour by July 2023. The proposal is supported by Ben Jealous, the Democratic candidate for governor. Governor Larry Hogan, a Republican, says he is willing to discuss an increase, but he is concerned about harming business or job growth.
How should small business owners prepare for potential changes to the minimum wage?
Maryland small business owners have spent the last few years adjusting to phased-in increases to the minimum wage, but they should pay attention to the gubernatorial race, whose outcome could affect further increases to hourly pay rates.
Under the proposed law before the general assembly, minimum wage would increase to $11 in July 2019, then by an additional dollar each July until the rate reaches $15 in 2023.
It remains to be seen whether Maryland minimum wage will continue to increase, but here are some other steps you can take to make sure your business is ready for anything:
- Reevaluate your staffing: Take a look at your hourly, weekly, and monthly sales to determine if your current staffing levels are appropriate. For example, perhaps you only need to hire temporary employees during your busy seasons instead of taking on more full-time, regular staff.
- Hire the best: Hiring the right people is always important, but doubly so when you operate a small business. So, take your time and cast a wide net when recruiting new employees. And, once you have your team in place, make employee retention a priority by offering them a path to growth and development and by making your business an attractive place to work.
- Upgrade your technology: When you automate complicated, time-consuming aspects of management, like payroll, you can spend more time focusing on issues like staffing and growing your business.
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