State Senate gives approval to minimum wage increase

State Senate gives approval to minimum wage increase

(April 11, 2014) As expected, the Maryland Senate gave final passage to a minimum wage increase this week that will see the state match the $10.10 wage promoted by the Obama Administration.

In a key concession to Republican lawmakers and business opponents, however, the new wage floor will be phased in over the next four years, hitting $10.10 by July 2018. The first incremental increase will be to $8.00 per hour, taking effect Jan. 1 2018 and rising every six months after that.

Also important for resort-area businesses is the provision of the bill that freezes the minimum hourly pay for tipped workers at $3.63, the current level

Tipped workers in Maryland are only required to be paid 50 percent of the federal minimum wage, $7.25 with the rest credited to their employer for year-end taxes. If their tips do not compensate up to the minimum wage, however, their employer is required to make up the difference

A provision in Governor Martin O’Malley’s original bill would’ve raised this to 70 percent of the state’s new minimum wage, up to $7.07 by 2018.

Extensive lobbying by the restaurant industry saw that provision removed when the bill went through Maryland’s House of Delegates last month.

However, pro-increase groups such as the Raise Maryland coalition lobbied extensively in the past few weeks to have the provision added back in, citing a recent figure that indicates the average wage for tipped restaurant workers in Maryland is $8.80.

Two proposed amendments to the final bill by Sen. Rich Colburn (R-37) would’ve created a carve-out for the nine Eastern Shore counties. One amendment would’ve prevented any increases unless economic impact studies were first completed by the state.

The other would’ve given the Eastern Shore counties an $8.25 minimum wage, Delaware’s current minimum, which Colburn said was to keep them competitive with neighboring businesses across the state line.

Colburn’s amendments, however, were defeated by the exact opposite split that finally passed the $10.10 increase.

The bill passed 13-to-34, with all 12 of the state’s Republican senators against.  The resort area’s Senator, Jim Mathias (D-38), was the only Democrat to cross party lines and vote for Colburn’s amendments and against the final increase.

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