Changes to Minimum Wage Rates
Changes to Minimum Wage Rates
Maryland, Virginia, and The District of Columbia
Maryland
As Maryland moves toward a $15 an hour minimum wage, the State distinguishes between large and small employers. Small employers include employers who have fewer than fifteen (15) employees. For those employers with fifteen or more employees, Maryland’s minimum wage rose to $12.50 an hour on January 1st, 2022. Employers with fewer than fifteen employees must pay $12.20 an hour beginning January 1st, 2022. The minimum wage will increase annually for both large and small employers, with large employers reaching $15 an hour on January 1st, 2025, and small employers reaching $15 an hour on July 1st, 2026.
Employers with fifteen or more employees:
- for the 12-month period beginning January 1, 2023, $ 13.25 an hour;
- for the 12-month period beginning January 1, 2024, $ 14.00 an hour; and
- beginning January 1, 2025, $ 15.00 an hour.
Employers with fewer than fifteen employees:
- for the 12-month period beginning January 1, 2023, $ 12.80 an hour;
- for the 12-month period beginning January 1, 2024, $ 13.40 an hour;
- for the 12-month period beginning January 1, 2025, $ 14.00 an hour;
- for the 6-month period beginning January 1, 2026, $ 14.60 an hour; and
- beginning July 1, 2026, $ 15.00 an hour.
Maryland also allows employers who employ individuals under the age of 18 an hourly wage that equals a rate of 85% of the State minimum wage. The minimum wage for tipped employees remains at $3.63 an hour but their hourly rate must equal or exceed the minimum wage including tips. Accordingly, the employer must make up the difference between the employee’s hourly rate and the minimum wage if the employee’s hourly rate including tips, does not meet the required minimum wage rate.
Virginia
Virginia is also moving towards a $15 an hour minimum wage but does not distinguish between large and small employers. Effective January 1st, 2022, Virginia’s minimum wage increased to $11 an hour for all employers. The only exception is for employees who are enrolled in an established employer on-the-job or other training program for a period not to exceed 90 days which meets standards set by regulations adopted by the Commissioner. Employers must pay employees enrolled in such a training program no less than the federal minimum wage, or 75% of the Virginia minimum wage, whichever is greater. The federal minimum wage remains at $7.25 an hour for 2022.
Virginia’s minimum wage will increase to $12 an hour on January 1st, 2023, $13.50 an hour on January 1st, 2025, and $15 an hour on January 1st, 2026. If the federal minimum wage should increase to a rate that is higher than the rate established by Virginia, the federal minimum wage rate will apply.
The minimum wage for tipped employees (employees who receive $30 or more in tips each month) in Virginia will remain at the federal rate of $2.13. Tipped employees still must earn the state minimum wage when tips are included. If employees do not earn enough in tips to reach the state minimum wage, the employer must make up the difference between the employee’s hourly rate and the required minimum wage.
District of Columbia
The District of Columbia (DC) has some of the most worker-friendly wage and hour laws in the country. Under DC’s minimum wage law, the minimum wage to be paid to employees in DC rose to $15 an hour on July 1, 2020. Under DC’s minimum wage law, the minimum wage will increase annually, based on the annual average increase (if any) in the Consumer Price Index (CPI) for all Urban Consumers in the Washington Metropolitan Statistical Area, as published by the Bureau of Labor Statistics. Any increase in the minimum wage that is based on the increase in the CPI will be adjusted to the nearest multiple of $.05. Accordingly, on July 1, 2021, the DC minimum wage increased to $15.20 an hour and on July 1, 2022, the District’s minimum wage will increase to $16.10.
DC’s minimum wage law also ties its minimum wage to the federal minimum wage. Under DC law, if the federal minimum wage is increased and becomes greater than the minimum wage required in DC, the DC minimum wage will be increased to the federal minimum wage plus $1.
DC’s minimum wage for tipped employees, which was increased to $5.05 on July 1, 2021, will increase to $5.35 on July 1, 2022. As with the District’s minimum wage for non-tipped employees, the minimum wage for tipped employees will increase annually based on the increase (if any) in the CPI. As in Maryland and Virginia, if the tipped employee’s hourly rate plus tips does not meet the minimum wage rate, the employer must make up the difference between the employee’s hourly rate and the required minimum wage.
