- Minimum wage
- Minimum Wage Calculator
- Tip minimum wage
- Tip pooling and sharing
- Subminimum wage
- Maryland Minimum Wage Laws 2022 FAQs
- Other State’s Minimum Wage Information
Maryland’s current minimum wage is $13.25 for large employers (15 or more employees) and $12.80 for small employees (14 employees or fewer), except in Montgomery counties. MD Statutes, Labor and Employment 3-413; Maryland Minimum Wage and Overtime Law
Under the current minimum wage legislation, Maryland’s minimum wage will increase as follows in the coming years:
Large employers (15 or more employees):
- January 1, 2024 – $14.00
- January 1, 2025 – $15.00
Small employers (14 employees or fewer)
- January 1, 2024 – $13.40
- January 1, 2025 – $14.00
- January 1, 2026 – $14.60
- July 1, 2026 – $15.00
MD Statutes, Labor and Employment 3-413
In Montgomery County, the minimum wage is currently:
- 51 or more employees – $15.00
- 11 to 50 employees – $14.00
- 10 or less employees – $13.50
Minimum Wage and Overtime Law in Montgomery County
Employers in Prince George’s County and Montgomery County will be required to pay the state minimum wage once it is greater than the local county minimum wage unless the counties continue to increase their minimum wages to exceed the state minimum wage. The state’s hourly rates are higher than the federal minimum wage.
Minimum Wage Calculator
Tip minimum wage
Maryland’s minimum wage for tipped employees is $3.63. MD Statutes, Labor and Employment 3-419(c)
Employers may pay employees the tipped wage rate if they work in occupations where they regularly earn more than $30 per month in tips.
They must also inform employees that they will be paid tipped wages before working in the tipped position. To be eligible for the tipped minimum wage, employees must keep all tips earned. MD Statutes, Labor and Employment 3-419(a)(1)
If an employer chooses to pay qualifying employees the tipped minimum wage rate, they must also ensure that the employees are paid the standard minimum wage rate when tipped wages are combined with tips earned. The difference between the tipped minimum wage and the standard minimum wage that may be credited to earned tips is called a tip credit. If the tip credit is not sufficient to ensure tipped employees are paid the standard minimum wage, the employer must pay employees wages sufficient to cover the shortage. MD Admin Rules 09.12.41.19(D)(3)
If tipped employees work more than 20% of their time performing non-tipped duties, the employer must pay the employees the standard minimum wage for the time spent performing the non-tipped duties. MD Admin Rules 09.12.41.19(D)(4) Also, tips must be allocated to the particular workweek in which they are earned. MD Admin Rules 09.12.41.19(D)(1) Mandatory service charges do not qualify as tips, even if retained by employees. MD Admin Rules 09.12.41.19(D)(2)
Additionally, an employer may pay a tipped employee a set amount for each workweek that represents the tips of the employee. When paid under a set tip amount system, an employee may assert with the Maryland Department of Labor that they actually received an amount of tips lower than the set amount paid by the employer. MD Statutes, Labor and Employment 3-419(b)
Tip pooling and sharing
Maryland’s minimum wage law permits tip pooling or sharing arrangements, and it does not prohibit employers from requiring employees from participating in such arrangements. MD Statutes, Labor and Employment 3-419(a)(2)
Employees with disabilities
Maryland minimum wage laws do not generally allow employers to pay individuals with disabilities a wage rate less than the standard minimum wage.
Work activity centers or other sheltered workshops may pay individuals with mental and/or physical disabilities a subminimum wage less than the standard minimum wage if:
- the work activity center or other sheltered workshop was authorized by the Maryland Department of Labor before October 1, 2016, to pay an employee with a disability less than the minimum wage that was allowed through an acceptance of a federal certificate; and
- the work activities center or workshop maintains the federal certificate.
The Department of Labor revoke the acceptance of the federal certificate if:
- the US Department of Labor revokes the certificate, or
- the Maryland Department of Labor finds good cause to revoke the certificate.
MD Statute, Labor and Employment Article 3-414
Maryland minimum wage laws do not allow employers to pay trainees a subminimum wage rate lower than the standard minimum wage.
Maryland minimum wage laws do not allow employers to pay apprentices a subminimum wage rate lower than the standard minimum wage.
Maryland minimum wage laws allow the Maryland Department of Labor employers to establish regulations that allow employers to pay learners a subminimum wage that is no less than 80% of the standard minimum wage.
Maryland minimum wage laws allow employers to pay employees in work-study programs less than the standard minimum wage.
A work-study program is a program where an individual may split normal school attendance between attending school and working.
An application for an individual to participate in a work-study program must be submitted to the Maryland Department of Labor by the work-study program coordinator. The application must be signed by the individual and the work-study coordinator and must identify:
- the title of the work-study coordinator;
- the name and address of the individual;
- the name and address of the employer;
- the type of work that will be performed;
- the hourly rate to be paid; and
- how long the individual will be paid below the standard minimum wage.
For more information, you can refer to the MD Admin Rules 09.12.41.22; see also MD Statutes, Labor and Employment 3-413
Maryland minimum wage laws do not allow employers to pay student workers a subminimum wage rate lower than the standard minimum wage unless they qualify as student learners.
Maryland Minimum Wage Laws 2022 FAQs
What are the minimum wage laws in Maryland pertaining to different types of employees?
According to the Maryland Department of Labor, agricultural workers are exempt from getting overtime and minimum wage requirements unless they exceed a 60-hour workweek. Even employees selling farm equipment are subject to certain overtime exemptions.
Non-administrative workers who are part of organized camps have minimum wage and overtime exemptions.
The same applies to administrative workers, executives, and other professionals. They have hourly minimum wage exemptions, including their overtime pay.
Seasonal workers, such as those who work in recreational establishments, should earn at least $7.25 or 85% of Maryland’s minimum wage rate whichever is higher.
Those who meet certain criteria should earn the full state minimum wage rate. You may simply contact the Maryland Department of Labor through their Employment Standards Service for more information.
The State of Maryland allows businesses to pay minor employees (aged 18 and below) to receive a youth minimum wage of $4.25 per hour, especially during the first 90 days of employment.
Employers with minors should also be aware of specific rules and exemptions for minors. For instance, minors aged 16 and 17 are not allowed to spend more than 12 hours in a combination of school hours and employment hours daily.
They will also require an eight-hour non-school and non-working period within each 24-hour period. This non-working period seeks to give working students the amount of rest they require.
There are other special minimum wage rates depending on the industry the employee belongs to.
For instance, the “Maryland Waitress Minimum Wage” benefits tipped employees in the hospitality industry. The same applies to employees of amusement industries that also traditionally accept tips.
There are various online references for those who want to learn more about overtime law. You may consult any guide to overtime as long as it specifically pertains to the state of Maryland.
There are also similar resources for exemptions and tips, such as the restaurant tip credit wage that many smaller businesses struggle with.
Will there be a minimum wage increase in Maryland in 2022?
As mentioned above, Maryland is currently implementing a series of minimum wage increases.
The current wage increases have brought the minimum wage to $12.20 to $12.50, depending on the company’s size and where it’s located in Maryland. These increases are set to continue until July 1, 2026.
How can businesses in Maryland prepare for future minimum wage increases?
There are different things that businesses can do to cope with the rising wages. Here are just some of them:
Improve Employee Retention
Employee turnovers are not just costly, but can also significantly impact your productivity and sales. After all, you can always expect new employees to undergo an adjustment period before they reach their optimal level of productivity.
Reassess Your Current Talent
Do you really need all your hourly employees? Maybe it would be a more affordable option to hire temporary employees.
We understand why there’s a stigma in laying off employees, especially amidst the economic challenges that the country is facing. However, a small business’ financial stability is different compared to larger businesses.
Invest in Technology
You can integrate business payroll software into your current system. This way, you’ll be able to prevent payroll issues, ensure compliance, and even collect valuable data about your business.
These business insights can prove essential, especially when you need to make hasty yet critical decisions.
Take Advantage of Other Available Business Resources
Read up more about minimum wage laws and, more importantly, the ones that pertain to where your business is located.
Some platforms offer a regular newsletter for business owners. Make the most out of these invaluable resources, especially since most of them even come at no cost at all.
Keep Track of Compliance Updates
Finally, the legal damages can really add up for businesses that fail to comply with wage payment laws. Thus, it would really help to set up a minimum wage increase schedule.