Update on the "Fight for Fifteen"

Date: March 14, 2019
By: Kevin C. McCormick

The Maryland Legislature is planning on making several significant changes in existing labor and employment policies that Maryland employers should be aware of.  One of these is H.B. 166/SB 280, the so-called “Fight for Fifteen.”  A summary of the proposed legislation follows.
This legislation, if enacted, would gradually raise the state minimum wage from $11.00 per hour, effective July 1, 2019, with successive $1.00 per hour increases for each year thereafter, until July 1, 2023 when the minimum wage will increase to $15.00 per hour.  Thereafter, that minimum wage will be adjusted annually as determined by the growth in the Consumer Price Index (CPI).  In the event that the Commissioner determines that there is no growth in the CPI, the state minimum wage rate shall remain the same as the rate that was in effect for the immediately preceding twelve-month period.
In addition to significantly raising the state minimum wage, the proposed legislation also raises the Tip Credit Allowance that is available for certain tipped restaurant workers.  As of July 1, 2019, the Tip Credit Allowance in Maryland is $3.63.  Under the proposed legislation, that Tip Credit Allowance will increase to $5.25 on July 1, 2020; $7.50 on July 1, 2021; $9.00 on July 1, 2022; $10.50 on July 1, 2023; $12.00 on July 1, 2024; $13.50 on July 1, 2025; and $15.00 beginning July 1, 2026. 
Beginning July 1, 2027, an employer may not include a tip credit amount as part of the wage of the employee and must pay an employee a wage that is at least equal to the state minimum wage established under this proposed legislation.

The proposal also includes modified language with regard to proving claims of retaliation, making it easier for an employee to make such a claim.  The proposed legislation also includes enhanced penalties for any violations including actual damages plus liquidated damages or $500 for each day that the violation continues.  If an employer is found to have committed repeated violations within six (6) years after a previous violation, the Commissioner or Court shall assess a civil penalty of not less than $10,000.   If enacted, legislation will take effect June 1, 2019. 

According to key Democratic legislators, increasing the minimum wage to $15.00 is among their top priorities for this legislative session and it is very likely that some form of this legislation will be approved this term.