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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. The current minimum wage in Maryland is $11 per hour for all businesses, which is $3.75 higher than the federal minimum wage. However, some employees 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, the minimum wage in Montgomery County is currently $14 per hour for employers with 51 or more employees, $13.25 for employers with 50 to 11 employees, and $13 for businesses that have 10 or fewer employees. Additionally, the minimum wage in Prince George’s County is currently $11.50 per hour for all businesses, which is 50 cents more than the state minimum wage. Be sure to check what local wage laws may apply to you.

Is minimum wage going up in Maryland for 2021?

Yes. The state’s general assembly voted to override Governor Larry Hogan’s veto of the Maryland minimum wage increase. The Maryland minimum wage for 2021 will be $11.75 for larger businesses and $11.60 for small businesses.

What’s happening with the minimum wage beyond 2021 in Maryland?

As part of the bill that was recently passed, the state minimum wage will gradually increase over time. The Maryland minimum wage is $15 per hour in 2025 for businesses with 15 or more employees, and in 2026 it will raise to $15 for businesses with 14 or fewer employees. The Maryland minimum wage increase schedule is as follows:

Date Employers with 15 or more Employers 14 or fewer
January 1, 2021 $11.75 $11.60
January 1, 2022 $12.50 $12.20
January 1, 2023 $13.25 $12.80
January 1, 2024 $14.00 $13.40
January 1, 2025 $15.00 $14.00
July 1, 2026 NA $15.00

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 any possible adjustments to the current wage increases.

It remains to be seen whether Maryland minimum wage will continue to increase past 2026, 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. If you are a new business, get your free EIN so you can begin hiring and remain compliant.
  • 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. Square’s small business payroll software is simple enough that you can learn how to do payroll yourself, and it can also help you avoid making common payroll mistakes.

Square is here to help you with small business resources to help you and your business thrive. Be sure to consult with your lawyer or tax attorney to fully understand the Maryland minimum wage laws and how they apply to your business.