On March 28, 2019, the General Assembly overrode the gubernatorial veto to enact the Minimum Wage Act, which raises Maryland’s minimum hourly wage to $15.00 by 2025. Maryland now becomes the sixth state to enact a $15.00 hourly minimum wage. It is estimated that around 570,000 Maryland workers (about 22 percent of the state’s workforce) will receive a raise under the new law.

The annual raises in minimum wage are:

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

For "small employers," the minimum wage does not reach $15.00 until July 1, 2026, and the annual raises are more gradual up until that point. The law defines a "small employer" as those with 14 or fewer employees.

As of July 1, 2018, the minimum wage had been raised to $10.10, which has seen annual increases since the 2014 amendments. The new law will not affect the minimum wage for tipped employees, which remains at $3.63/hour.

The law also modifies existing wage law by allowing those under age 18 to be paid at a rate of 85 percent of the minimum wage, a change from the existing law that applied to anyone under age 20.

This law sets Maryland apart from its neighboring states where the current minimum wage in Pennsylvania is $7.25, Virginia is $7.25, Delaware is $8.75, West Virginia is $8.75, and Washington D.C. is $13.25.

This development in 2019 comes after a busy 2018 created several other employment law obligations for Maryland employers to pay attention to. As reported in a previous blog, under the Maryland Healthy Working Families Act, Maryland employers with 15 or more employees must now offer up to five paid sick days per year for covered reasons. Last year also saw the passage of the Disclosing Sexual Harassment in the Workplace Act, also analyzed in a previous blog. This law imposed reporting requirements for large employers to the state discrimination agency when settlements are made for sexual harassment claims.

Maryland employers must take steps now to analyze the legal and economic impact this minimum wage increase will have on their business.