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Reminder: Maryland Minimum Wage Increases January 1, 2020

As we blogged about earlier this year, the General Assembly voted to override Governor Hogan’s veto of legislation increasing the minimum wage.  This means the minimum wage in Maryland will increase to $15 per hour by 2025 for employers with 15 or more employees (and by 2026 for employers with less than 15 employees).  The increase is gradual, and tomorrow, January 1, 2020, the first increase will occur when the minimum wage will move to $11 per hour for all employees.  As a reminder, the increases for employers with 15 or more employees will be:

  • January 1, 2020 – $11.00 per hour
  • January 1, 2021 – $11.75 per hour
  • January 1, 2022 – $12.50 per hour
  • January 1, 2023 – $13.25 per hour
  • January 1, 2024 – $14.00 per hour
  • January 1, 2025 – $15.00 per hour

The minimum wage for employers with 14 or fewer employees are:

  • January 1, 2020 – $11.00 per hour
  • January 1, 2021 – $11.60 per hour
  • January 1, 2022 – $12.20 per hour
  • January 1, 2023 – $12.80 per hour
  • January 1, 2024 – $13.40 per hour
  • January 1, 2025 – $14.00 per hour
  • January 1, 2026 – $14.60 per hour
  • July 1, 2026 – $15.00 per hour

Local jurisdictions, such as Montgomery and Prince George’s Counties, have their own minimum wage requirements that exceed the State’s.  Montgomery County requires $13 per hour for employers with more than 50 employees and $12.50 per hour for employers with 50 or fewer employees.  These rates will increase July 1, 2020.  Prince George’s County requires $11.50 per hour for all employers and will remain at this rate until January 1, 2021, when it will apply Maryland’s minimum wage rate.

In addition to the minimum wage increase, the weekly salary level test for exempt employees under the Fair Labor Standards Act will be increasing from $455 per week (or $23,600 annually) to $684 weekly (or $35,568 annually) as of January 1, 2020.  Employers will want to complete promptly any audits to ensure that their exempt employees are receiving the proper weekly salary payment, which may include up to 10% of the standard salary level from compensation paid in non-discretionary bonuses, incentive payments or commissions, under certain circumstances.  Our previous discussion of this final rule is available here.

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