The New Year ushers in a new state minimum wage, with rates increasing to $11.75 per hour for companies with 15 or more employees and $11.60 per hour for those with 14 or fewer employees.

Many jurisdictions have grappled with the minimum wage issue in recent years, with 29 states and the Washington, D.C. mandating wages above the federal minimum wage of $7.25 per hour. Currently, only five states have no minimum wage and two have a minimum wage below the federal standard, though the federal minimum wage still applies in all seven of these states.

Maryland’s minimum wage law was last changed in 2019 when the General Assembly passed the current legislation mandating the escalating rate structure now in place. The rate will continue to increase each year until it reaches $15 by 2024 for the state’s largest employers. While the rate change is relatively straightforward, employers should be aware that there are a number of exceptions and exemptions.

Tipped Employees and Exemptions

In addition to the new minimum wage rates, those for tipped employees and other establishments will also change. According to the Maryland Department of Labor:

  • Tipped employees (earning more than $30 per month in tips) must earn the state minimum wage rate per hour. Employers must pay at least $3.63 per hour. This amount plus tips must equal at least the state minimum wage rate.
  • When it comes to overtime, most employees must be paid 1.5 times their usual hourly rate for all work over 40 hours per week.
  • Exceptions to this include bowling establishments and institutions providing on premise care (other than hospitals) to the sick, the aged, or individuals with disabilities for all work over 48 hours per week.
  • Agricultural workers must be paid overtime for all work over 60 hours per week.

Exemptions to the new minimum wage and overtime requirements include:

  • Immediate family members of the employer.
  • Certain agricultural employees.
  • Executives, administrative, and professional employees.
  • Volunteers for educational, charitable, religious, and non-profit organizations.
  • Employees under 16 working less than 20 hours per week.
  • Outside salespersons.
  • Commissioned employees.
  • Employees enrolled as a trainee as part of a public school special education program.
  • Non-administrative employees of organized camps.
  • Certain establishments selling food and drink for consumption on the premises grossing less than $400,000 annually.
  • Drive-in theaters.
  • Establishments engaged in the first canning, packing or freezing of fruits, vegetables, poultry, or seafood.

Overtime only exemptions include:

  • Taxicab drivers.
  • Certain employees selling/servicing automobiles, farm equipment, trailers, or trucks.
  • Non-profit concert promoter, theater, music festival, music pavilion, or theatrical show.
  • Employers subject to certain railroad requirements of the U.S. Department of Transportation, the Federal Motor Carrier Act, and the Interstate Commerce Commission.
  • Seasonal amusement and recreational establishments that meet certain criteria.

Talbot County business owners will need to evaluate their policies and procedures to ensure compliance with the law. For more information about Maryland’s, minimum wage, contact the Maryland Department of Labor.