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County Minimum Wage Increases on July 1

Beginning July 1, the minimum wage will increase in Montgomery County. The size of the increase is determined by the number of workers a business employs. The new law, which was approved by the County Council and signed by County Executive in November of 2017, states that County businesses with 51 or more employees must pay workers $12.50 per hour. Employers with 50 or fewer workers will be required to pay employees $12 hourly.

The July 1 increase is the first step up in route to a $15 per hour minimum wage. In 2017, the Council approved Bill 28-17 which will increase the County’s minimum wage to $15 per hour on July 1, 2021 for large employers with 51 or more employees. Mid-sized employers with between 11 and 50 employees must raise wages to at least $15 per hour on July 1, 2023. Small employers with 10 or fewer employers must pay workers $15 per hour on July 1, 2024.

“It is essential for all employers to ensure workers are paid the legal minimum wage,” said Montgomery County Office of Human Rights Director James Stowe. “We are pleased to work with chambers of commerce, Montgomery County Business Portal and the Maryland Labor, Licensing and Regulation (DLLR) website to inform and educate area employers to ensure full compliance."

An employer who provides "home health services" or "home or community-based services" and receives at least 75 percent of gross revenues through state and federal Medicaid programs, may apply to the Office of Human Rights for designation as an eligible services provider subject to an adjusted implementation schedule.

The minimum wage does not apply to employees younger than the age of 19, who work fewer than 20 hours per week. However, an employer may pay a wage equal to 85 percent to employees under the age of 20 years for the first six months that the employee is employed.

The bill was sponsored by At-Large Councilmember Marc Elrich, and co-sponsored by Councilmembers George Leventhal (At-Large), Hans Riemer (At-Large), Tom Hucker (District 5) and Nancy Navarro (District 4).

The bill has provisions for non-profit organizations with 501(c)(3) designations and eligible service providers to raise wages to $15 per hour by July 1, 2023, unless they are considered a small employer.

In addition, Bill 28-17 provides that the minimum wage must be adjusted annually for inflation according to the Consumer Price Index for urban wage earners and clerical workers (CPI-W), starting July 1, 2022. This bill also provides for an opportunity wage, which is equal to 85 percent of the County’s minimum wage for employees under the age of 20 for the first six months of employment.

Councilmember Marc Elrich, who is one of the two top vote-getters in Tuesday’s Primary Election for the Democratic nominee for County Executive in the November elections, who was the lead sponsor of the bill and in November of 2017 he said: “By passing this bill we recognize that people who work deserve to earn a decent wage. Raising the minimum wage is good for families, for neighborhoods and for our schools.”

“I taught in a high-poverty school in Montgomery County for 17 years,” said Elrich in November, “and I saw up close the effects of poverty. Poor children live in homes where their parents are highly stressed about paying for rent, food and medical care – basic necessities of life. That stress has an enormous impact on their children, and those impacts have lasting effects.”

In January of this 2017, the Council voted of 5-4, for another measure to increase the minimum wage. That bill, Bill 12-16, would have extended the incremental minimum wage increases in County law to $15 by 2020 for many employees. That bill was criticized as being too much too fast, which resulted in the split vote. The scheduled increases under the old bill were based on the size of the employer. Workers whose employers had 26 or more employees would reach $15 per hour in 2020. Employers with 25 or fewer employees would reach $15 in 2022.

It was vetoed by County Executive Ike Leggett on January 23, 2017. The Bill approved in November 2017 was in response to Leggett’s veto.

In August 2017, a study commissioned by the County found that increasing the minimum wage would cost the county thousands of jobs. However, that study conducted by Philadelphia-based firm Public Financial Management (PFM), was found to have major flaws. The study initially predicted that 47,000 jobs would be lost by 2022 if a $15 minimum wage was required. However, later that month, the research group admitted to “a computation error” by a subcontractor led to overestimating the number of lost jobs in the County. The County and the PFM have mutually agreed that the flawed study will not be paid for by the County.

The federal minimum wage is $7.25 per hour and has remained static since 2009. The State minimum wage is $9.25 in 2017 and will increase to $10.10 in 2018.

Montgomery County was the second jurisdiction in the area to approve a $15 minimum wage. In 2016, the Washington D.C. City Council okayed legislation calling for a $15 wage by 2020. The minimum wage in Prince George County is $11.50 per hour, while northern Virginia suburbs minimum wages are tied to the federal minimum wage of $7.25 per hour.

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