Minimum Wages Moving Up in DC and Suburban Maryland: Will the Federal Government Follow?

On January 15, 2014, District of Columbia Mayor Vince Gray signed a bill that will increase the District’s minimum wage to $11.50 per hour by 2016. The new law will raise the District’s minimum wage from $8.25 to $9.50 an hour on July 1, 2014 followed by one-dollar hikes on July 1 in each of the following two years. After 2016, the minimum wage would be pegged to the increases in the consumer price index. Although Gray signed the bill, his administration has not ruled out the possibility that he might try to tweak it in some manner as it is rolled out. Gray’s office commissioned a minimum wage study from the Urban Institute, which is due to be delivered later this winter. “I’m not sure what those changes would be,” Gray said at a press conference following the signing. “I was delighted to sign it.”

The District’s minimum wage increase comes on the heels of increases in Montgomery County and Prince George’s County, Maryland. On November 23, 2013, following a very contentious final reading, the Montgomery County Council voted 8-1 to approve a minimum wage bill that will impact an estimated 83,000 private sector and county employees. The bill, which County Executive Ike Leggett signed on December 5, 2013, will increase the minimum wage in the County from $7.25 to $11.50 an hour. The 59 percent increase will be phased-in over the next four years: $8.40 per hour on October 1, 2014, $9.55 per hour on October 1, 2015, $10.75 per hour on October 1, 2016, and $11.50 per hour on October 1, 2017. Similarly, on December 23, 2013, Prince George’s County Executive Rushern Baker signed a bill passed by the County Council, raising the minimum wage there to $8.40 per hour beginning October 1, 2014. The wage will increase incrementally each year following in the same schedule as Montgomery County, until it reaches $11.50 in 2017.

The question for employers is whether other jurisdictions will follow suit. The likely answer, given nationwide trends, is yes. President Obama has long made his position known: that the federal minimum wage, which increased to $7.25 in 2009, should increase to over $10.00 per hour. At a recent meeting with Democratic Senators, President Obama indicated that he is giving serious consideration to executive action designed to raise the minimum wage for employees of federal contractors. Thus, while sweeping federal legislation raising the minimum wage to $10.00 may not be imminent, the President could begin to increase wages for certain groups of employees by executive order.

Increasing the minimum wage has also become popular in a number of states. Maryland Governor Martin O’Malley recently announced that his final legislative package will include a bill to increase the minimum wage statewide. O’Malley’s plan would raise the minimum wage to $10.10 per hour by 2016 and index the minimum wage to inflation beginning in 2017. Other states, such as Massachusetts, Minnesota, New Hampshire, and South Dakota have announced that they plan to seek minimum wage hikes next year through legislation or ballot initiatives. These states join the 13 states that instituted minimum wage hikes that took effect on January 1, 2014: Arizona; Colorado; Connecticut; Florida; Missouri; Montana; New Jersey; New York; Ohio; Oregon; Rhode Island; Vermont; and Washington. California has a $1 increase scheduled for July 2014 and another one in January 2016.

Arent Fox’s Labor & Employment practice will continue to monitor changes in the minimum wage laws across various jurisdictions. If you have any questions about this issue, please contact the authors or any other member of the Group.