Scheduled Increase to Montgomery County Minimum Wage to Take Effect in July

Effective July 1, 2024, Montgomery County’s minimum wage rates are set to rise to $17.15 for large employers and $15.50 for medium–sized employers.

A Glimpse Into the History of Montgomery County Minimum Wage Rates 

In November of 2017, the Montgomery County Council approved a new ordinance that would impact the county’s minimum wage rates moving forward. The bill required the following: 

• An increase to the county minimum wage
• To adjust the minimum wage on an annual basis
  
• An annual analysis of the fiscal impact of the set wage
• To generally amend laws deemed necessary

Employers should be aware that Montgomery County separates companies in their jurisdiction into three categories; large, medium, and small. All companies have a minimum wage effective date of July 1 each year, with the exception of small companies, who must raise their minimum wage to $15.00/hour, effective Jan.1, 2024. Correspondingly, the county announced that the minimum wage for large companies will increase to $17.15/hour, with medium–sized only behind by $2.15 with a rate of $15.50/hr. Small company minimum wage rates will not increase, as they rose to $15.00/hour on Jan. 1, 2024.  

Large employers employing individuals who earn tips should note that the maximum tip credit is now $13.15. As a reminder, the tipped employee wage will remain at $4.00/hour. 

Montgomery County Minimum Wage Requirements 

As mentioned, employers in the jurisdiction are categorized as large, medium, and small, which are defined below:  

• Large employer: an employer who employs 51 or more employees 
• Medium employer: an employer who employs between 11 and 50 employees or has specific tax-exempt status, or provides “home health services” 
• Small employer: an employer who employs 10 or fewer employees 

Generally, employers can calculate which category they fall under based on how many employees they employ on average per calendar week from the preceding year. 

Businesses in Montgomery County may wonder, how does the determination of business size impact overtime requirements? Fortunately, businesses can look towards the state and federal overtime rate requirements. As laid out in the Maryland Labor and Employment Code, “each employer shall pay an overtime wage of at least 1.5 times the usual hourly wage” regardless of the size of the company.  

Posting Requirements 

Montgomery County, along with other jurisdictions in Maryland, provides employers with easy access to minimum wage rate information. The County requires that all employers display a poster in English for their employees to reference. A Spanish poster is available but not required. 

As of this article’s publication date, the updated minimum wage posters have not yet been made available by the county. Once it has been provided, GovDocs will supply the new posters.  

Consequences of Non-Compliance with Minimum Wage Rates  

Neglecting to pay your employees the appropriate rate of pay can cause tremendous damage to a business. Montgomery County employers must pay the highest wage required, whether that be at the state or the county level. Failure to do so may result in a complaint being filed against an employer, and any violation found may subject an employer to paying appropriate damages.  

Employers in Montgomery County must be aware of the complexities of the county’s multiple minimum wage rates. Having access to a minimum wage management platform helps ensure you and your team stay up to date on the latest changes to minimum wage law at the federal, state, county, and city levels. 

This Employment Law News blog is intended for market awareness only, it is not to be used for legal advice or counsel.