On May 5, 2014, Governor Martin O’Malley signed a law to raise the minimum wage in Maryland to $10.10 an hour by July 1, 2018. The law, which goes into effect January 1, 2015, gradually mandates an increase in minimum wage a total of 5 times before it reaches $10.10 in July 2018. The minimum wage, which is currently $7.25 per hour, will increase under the following schedule: January 1, 2015 $ 8.00 July 1, 2015 $ 8.25 July 1, 2016 $ 8.75 July 1, 2017 $ 9.25 July 1, 2018 $10.10 The law further amends Maryland’s wage laws as follows:
- Employers can pay employees under 20 years of age less than the minimum wage for the first six months of employment as long as the wage is at least 85% of the state minimum wage in effect at that time.
- Employees paid based on the tip credit will be held at a cash minimum wage of $3.63 per hour.
- The minimum annual revenue a restaurant must generate to be subject to the new minimum wage law will rise from $250,000 to $400,000.
The most notable provision under the new law that can have a negative effect on employers is the increase in recovery available for employee unpaid wage and overtime claims. Currently the law in Maryland provides only for recovery of unpaid wages or overtime and leaves it up to the court to determine whether attorney’s fees should be awarded. The new law will automatically award the employee his/her attorney’s fees plus an award for damages equal to that of the unpaid wages unless the employer can prove that all unpaid wages and overtime have been paid under the new law.
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