Montgomery County Minimum Wage increases in 2018
County legislatures in Montgomery County just passed a law that will raise minimum wage on July 1, 2018 With the passing of this new law, Montgomery County becomes the sixth country to pass minimum wage laws.
Currently Los Angeles County California, Cook County, Illinois, Bernalillo County, NM, and Santa Fe County, NM already have imposed minimum wages across the unincorporated parts of the county.
Earlier in the year the County Executive Isiah Leggett (D) vetoed a bill citing a study that showed that Montgomery County would lose 47,000 jobs over the next five years if the minimum wage rose to $15.
Shortly thereafter, the University of Washington published another study showing that minimum wage workers actually saw a decrease in monthly income after Seattle’s minimum wage went up.
The City of Seattle (amazon) was an ideal case study for the effects of minimum wage because it already had one of the lowest unemployment rates in the country and had a highly skilled workforce with a high medium income.
Likewise, Montgomery County boasts the highest median income in the country with medium wages of $95,000 a year.
Nevertheless, even with all the things going for Seattle, many businesses have reduced staff, cut hours, or replace employees with technology in order to continue to make ends meet when wage expense increased from the wage hikes.
In Montgomery County business owners responded that they might also be forced to take similar actions in order to stay in business.
Overview of Montgomery County Minimum Wage Schedule
Minimum wage in Montgomery County rose to $11.50 on July 1, 2017, but will see yet another raise on July 1, 2018. The new ordinance splits Montgomery employers into three groups.
Small employers are those with 1-10 employees.
Mid-sized employers are businesses who have 11-50 employees.
Large employers are those with 51 and more employees.
Large employers will be required to pay a minimum wage of $12.25 an hour. The rate will rise again to $13.00 an hour on July 1, 2019.
In the middle of 2020, it will increase to $14.00 an hour and will become $15.00 an hour in 2021. Thereafter it will be adjusted annually based on the Consumer Price Index for Urban wage Earners and Clerical Workers.
Mid-sized employers will also see an increase in minimum wage on July 1, 2018. The new wage for their employers will become $12.00 an hour. \
The rate for mid-sized employers becomes $12.50 in July of 2019 and $13.25 in 2020. In 2021 mid-sized minimum wage will increase to $14.00 on July 1 and to $14.50 a year later in 2022. It will become $15.00 on July 1, 2023.
Small employers also see an increase in minimum wage, but have more time until it becomes effective. On July 1, 2018 the wage will increase to $12.00 an hour. One year later it increases to $12.50 (2019) and then to $13.00 an hour on July 1, 2020. July 1, 2021 small employer minimum wage raises to $13.50.
It becomes $14.00 min year in 2022 and will raise $0.50 to $1450 in 2023. On July 1, 2024 small employer minimum wage will joining mid-sized and large employer minimum age to become $15.00.
|Effective Minimum Wage||Small Employer
|July 1, 2017||$11.50||$11.50||$11.50|
|July 1, 2018||$12.00||$12.00||$12.25|
|July 1, 2019||$12.50||$12.50||$13.00|
|July 1, 2020||$13.00||$13.25||$14.00|
|July 1, 2021||$13.50||$14.00||$15.00|
|July 1, 2022||$14.00||$15.00||CPI|
|July 1, 2023||$14.50||CPI||CPI|
|July 1, 2024||$15.00||CPI||CPI|
|July 1, 2025||CPI||CPI||CPI|
Minimum Cash Wage
The minimum cash wage in Montgomery county remains at $4.00 an hour.
However, the employer can only pay the minimum cash wage if the employee’s tips plus the minimum cash wage equal the minimum wage, based on the size of the employer.
Suspending Minimum Wage Increases
The County Commissioner can suspend the increase of minimum wage for one year if certain conditions are met.
However, even if t hose conditions persist for more than one year, minimum wage cannot be delayed more than twice.
The bill does not specify if that is intended as no more than two years consecutively or two years total during the duration that the bill is in effect. The conditions under which minimum wage can be suspended include:
- Private employment in the county drops by 1.5% between April 1 and June 30 of the previous year
- Private employment in the county drops by 2.0% from Jan 1 to June 30 of the previous year
- The Gross Domestic Product for the USA declines during the preceding 2 quarters
- The National Bureau of Economic Research determines that the USA in in a recession.
In other words, the County Commissioner can suspend minimum wage during the first year or two of a recession, but even if a recession, either in the county or the USA, becomes lasting and difficult, the county executive must still resume minimum wage increases after 2 years.
Exceptions to the New Minimum Wage in Montgomery County
The County exempts minors from the minimum wage law. Any employee who works less than 20 hours a week and is under the age of 19 does not have to be paid minimum wage.
Additionally, any employee who is subject to an opportunity wage under the Federal or State law is also excluded from the new minimum wage.
Lastly, anyone who is exempt from the Federal minimum wage is exempt from the new law.
The Opportunity to Work allows an employer to pay 85% of minimum wage to any employee who is under the age of 20 years for the first six months of their employment.
Let SwipeClock Help
Businesses in Montgomery Maryland have recently had to rewrite existing employee leave policies to comply with a countywide sick leave law and must now prepare to comply with the new minimum wage increases.
Additionally, these businesses have to also comply with Federal Overtime Laws, the Family Medical Leave Act and any other national or local laws that are enacted. SwipeClock provides a comprehensive array of workforce management and time tracking tools that can help businesses to more easily stay in compliance with local and national laws.
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Written by Annemaria Duran. Last updated on December 19, 2017.