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Maryland Minimum Wage Goes to $6.55 in July

April 23rd, 2008 Posted by Amelia

The Maryland minimum wage will increase to $6.55 per hour, along with the federal minimum wage on July 24, 2008. Under the Maryland minimum wage statute, the state rate is replaced by the federal rate, if the federal minimum wage is higher.

Currently the Maryland minimum wage is $6.15 per hour and has been unchanged since February 16, 2006. The federal minimum wage is $5.85 per hour, a change that was effective in July 2007.

A recent change to the Maryland wage and hour regulations was prompted by a state court decision that in some cases, vacation can be considered “earned wages.” According to the Maryland Division of Labor and Industry website, employees are entitled to payment for earned and unused vacation at termination, unless the employer specifically has a written policy in place that prohibits such payment.

The court’s ruling was not entirely clear, and it’s possible that in the near future, every Maryland employer will have to pay earned vacation time upon termination. A few employers are already doing so, as a precaution.

Under Maryland law, a terminated employee must receive his or her final paycheck on the regular payday. This is true regardless of whether the employee quit or was fired.

Maryland has many exceptions to the state’s minimum wage laws. In Maryland, as in other states, employees are covered by the federal FLSA or Fair Labor Standards Act if the employer generates more than $500,000 in revenue each year, or if the employee engages in interstate commerce.

Employees who work for smaller companies are covered under the state minimum wage law.

The Maryland minimum wage statute, as well as the FLSA, entitle most workers to an overtime premium when they work more than 40 hours in one week. Workers must be paid 1.5 times their usual hourly wage for overtime.

The Fair Minimum Wage Act of 2007 is a three-step process to increase the federal minimum wage over three years. The first increase occurred on July 24, 2007, raising the 2006 wage by 70 cents from $5.15 to $5.85 per hour. The second increase is scheduled for July 24, 2008, the third on July 24, 2009, for a total increase of $2.10 per hour.

This increase to the federal minimum wage is the first in over a decade. Full-time minimum wage workers will see a total increase of $84 per week, or $4,368 per year.

The increase has supporters and detractors. Supporters stress that the minimum wage of $5.15 per hour in 2006 purchased less, than the $1.60 per hour minimum wage in 1968. Amazingly, the federal minimum wage would have to go up to $9.12 per hour to match the 1960s purchasing powers.

Detractors of the increase are concerned that upping the federal minimum will diminish employment opportunities for entry level and for unskilled workers.

The federal minimum wage applies to companies with more than 50 workers, or with annual earnings greater than $500,000, or employers that conduct business interstate. Interstate business can include regular mailings to potential customers in another state, manufacturing goods for out-of-state sale, or purchasing supplies from out-of-state vendors.

The entire company doesn’t have to engage in interstate commerce for the employees to be eligible for the federal minimum wage. For instance, an administrative assistant who answers out-of-state calls could be eligible for a federal minimum wage salary.

In many states, the state-mandated minimum wage is greater than the federal minimum. If an employee qualifies for both state and federal minimum, that employee is entitled to whichever wage is greater.

The U. S. Department of Labor’s Wage and Hour Division enforces the federal minimum wage law and wants to remind employers that paying a worker less than minimum is a violation of the FLSA (Fair Labor Standards Act of 1938). In addition, every worker is entitled to receive their paycheck on their regular payday.