Increased Minimum Wage and a Proposal to End the Tip Credit in DC

July 1st Brings Increases to Maryland & D.C. Minimum Wages

July is here, and that means barbecues, fireworks and … rising minimum wages. On July 1, 2018, the minimum wages in Maryland, D.C. and Montgomery County increased. In Maryland, the statewide minimum wage rose from $9.25 to $10.10 in accordance with House Bill 295, signed into law by Governor Martin O’Malley in 2014. Both D.C. and Montgomery County recently enacted legislation to progressively increase the minimum wage to $15, with the first increase taking place this year. As a result, on July 1, the District’s minimum wage rose from $12.50 to $13.25, and in Montgomery County the minimum wage rose from $11.50 to $12.25 for large employers (over 50 employees) and $12.00 for medium and small employers (50 employees or less). Employers should confirm that all applicable payroll changes have been made in order to comply with the new minimum wages.

D.C. Residents Vote to Approve Initiative 77 – Eliminating Tip Credit

On June 19, residents of D.C. voted to eliminate the “tip credit” which currently allows employers in industries where tipping is common (i.e., restaurants) to offset their minimum wage obligations with the tips earned by employees. The ballot measure, known as Initiative 77, would phase out the “tip credit” by incrementally increasing the minimum wage for these tipped employees beginning in 2018 until it reaches $15.00 in 2026. However, before Initiative 77 becomes effective it first must face a 30-day congressional review period, after which it may still be amended or overturned by the D.C. Council – a majority of whom, as well as D.C. Mayor Muriel Bowser, have already publicly opposed the measure. Stay tuned for more information on this important issue as it becomes available.

Contact info: Meredith S. Campbell Chair, Employment and Labor Group, Shulman Rogers [email protected] | T 301.255.0550 | F 301.230.2891