Maryland Follows Minimum Wage Trend

On April 7, 2014, the Maryland General Assembly passed the Maryland Minimum Wage Act of 2014 (the Act), increasing the state’s minimum wage rate to $10.10 per hour by July 1, 2018. The Act is expected to be signed by Governor Martin O’Malley (D), who made increasing the minimum wage his top priority for his final legislative session.

The Act will generally require employers to pay covered employees the greater of the highest minimum wage under the federal Fair Labor Standards Act (FLSA) or the state minimum wage rates set forth below:
 

Under the Act, the tip credit for employees who customarily and regularly receive more than $30 each month in tips will decrease to the state minimum wage, less $3.63. Thus, the tip credit increases as the State minimum wage increases.

“If an employer pays an employee less than the wages due under the Act, the employee may bring an action to recover the difference between the wages paid and those required under the Act, plus an additional amount equal to such difference as liquidated damages.”

Interestingly, the state minimum wage will increase less and at a slower rate than the minimum wage rates in Montgomery County and Prince George’s County, Maryland, previously reported here.

The Act also repeals the provision that exempts certain employers from state overtime requirements, including hotels, motels, restaurants, gasoline stations, private country clubs, and non-profit home health companies, although most of these employers are already required to pay overtime compensation under the federal FLSA.

If an employer pays an employee less than the wages due under the Act, the employee may bring an action to recover the difference between the wages paid and those required under the Act, plus an additional amount equal to such difference as liquidated damages. The employee may also recover reasonable counsel fees and costs. The court must award these amounts to the employee, unless the employer shows to the satisfaction of the court that the employer acted in good faith and reasonably believed that the wages paid to the employee were not less than the wages required under the Act. In which case, the court can either lessen or deny the award of liquidated damages.

If you have any questions about the Act, please contact the authors or any other attorney in the Arent Fox Labor & Employment Group.