Agenda Item 6A
October 1,2013
Introduction
MEMORANDUM
September 27,2013
TO:
FROM:
County Council
~\
Robert H. Drummer, Senior Legislative Attorney
r~
SUBJECT:
Introduction:
Bill 27-13, Human Rights and Civil Liberties - County Minimum
Wage Dollar Amount
Bill 27-13, Human Rights and Civil Liberties - County Minimum Wage
Dollar
Amount, sponsored by Councilmember Eirich, is scheduled to be introduced on October 1. A
public hearing is tentatively scheduled for October 24 at 7:30 p.m.
Bill 27-13 would:
• require certain private sector employers in the County to pay a minimum
wage to employees working in the County;
• provide a credit for an employer who provides health insurance to
employees working in the County;
• provide enforcement by the Office of Human Rights and the Human
Rights Commission;
• authorize the Human Rights Commission to award relief for violations;
and
• generally regulate the minimum wage paid to a private sector employee
working in the County.
Background
Maryland's minimum wage is only $7.25 per hour, or $15,000 a year for a full-time, year
round worker, and leaves a full-time earner and their families below the federal poverty line.
Nineteen states have raised their minimum wages above Maryland's rate, including Alaska,
Arizona, California, Colorado, Connecticut, Florida, Illinois, Maine, Massachusetts, Michigan,
Missouri, Montana, New Mexico, Nevada, Ohio, Oregon, Rhode Island, Vermont, and
Washington, as well as the District of Columbia.
In addition, the minimum standard of living in Montgomery County is higher than the
minimum standard of living in many other counties in Maryland. Poverty level wages increases
the need for the County to spend public money for the relief of these low wage earners and their
families.
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Bill 27-13 would establish a County mmlmum wage for private sector employees
working in the County unless the State or federal minimum wage is higher. The COWlty
minimum wage would be phased in over several years. The rate would be $8.25 per hour on July
1,2014, $9.75 per hour on July 1,2015, and $12.00 per hour on July 1,2016. During the phase­
in period between July 1,2014 and July 1, 2016,
~n
employer would be able to pay the prior year
rate for an employee's first 90 days on the job. Beginning on July 1,2017, the $12.00 rate would
be raised by any increase in the Consumer Price Index on an annual basis. The County minimum
wage would not apply to a worker who is not covered by the State minimum wage, a tipped
employee, or a worker subject to an opportunity wage under the State or federal law.
Bill 27-13 would also encourage employers to provide health insurance by giving an
employer a credit for the cost of the employer's share of the health insurance premium per
employee. The County Office of Human Rights would be responsible for enforcement of the
law. A worker would be able to file a complaint with the Office of Human Rights and obtain an
adjudicatory hearing before the Human Rights Commission.
Legal Authority
Montgomery County can pass its own minimum wage law even though the State of
Maryland has a minimum wage law. In
City of Baltimore v. Sitnick,
254 Md. 303 (1969), the
Maryland Court of Appeals upheld a city ordinance establishing a minimum wage standard that
was higher than the State standard. In that case, the plaintiffs argued that State law had
preempted the field of minimum wage. In rejecting that argument, the Court held that the City of
Baltimore could pass its own minimum wage law based on the city's exercise of concurrent
power because the city law did not conflict with the State law.
This packet contains:
Bill 27-13
Legislative Request Report
Circle #
I
8
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Bill No.
27-13
Concerning: Human Rights and Civil
Liberties - County Minimum Wage -
Doflar Amount
Revised: September 17, 2013 Draft No.
Q
Introduced:
October 1, 2013
Expires:
April 1, 2015
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective:
July 1, 2014
Sunset Date:
-.!..!.No~n.!:::e=--
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmember EIrich
AN
ACT
to:
(1)
(2)
(3)
(4)
(5)
require certain employers in the County to pay a minimum wage to certain
employees working in the County;
provide a credit for certain employers who provide health insurance to employees
working in the County;
provide enforcement by the Office of Human Rights and the Human Rights
Commission;
authorize the Human Rights Commission to award certain relief; and
generally regulate the minimum wage paid to an employee working in the County
for certain employers.
By amending
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Sections 27-7 and 27-8
By adding
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Article XI, Minimum Wage
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No.
27-13
1
Sec.
1.
Sections 27-7 and 27-8 are amended and Chapter 27, Article
2
XI is added as follows:
27-7. Administration and enforcement.
(a)
Filing complaints.
Any person subjected to a discriminatory act or
3
4
5
practice in violation of this Article
l
or any group or person seeking to
enforce this Article or [Article] Articles X or XI, may file with the
Director a written complaint, sworn to or affirmed under the penalties of
perjury, that must state;
(1)
the particulars of the alleged violation;
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7
8
9
10
11
12
(2) the name and address of the person alleged to have committed the
violation; and
(3) any other information required by law or regulation.
13
*
(t)
(1 )
*
*
14
15
Initial determination, dismissal before hearing.
The Director must determine, based on the investigation, whether
reasonable grounds exist to believe that a violation of this Article
or [Article] Articles X or XI occurred and promptly send the
determination to the complainant and the respondent.
16
17
18
19
(2)
If the Director determines that there are no reasonable grounds to
believe a violation occurred, and the complainant appeals the
determination to the Commission within 30 days after the
Director sends the determination to the complainant, the Director
promptly must certifY the complaint to the Commission. The
Commission must appoint a case review board to consider the
appeal. The board may hear oral argument and must:
(A)
(B)
dismiss the complaint without a hearing;
order the Director to investigate further; or
20
21
22
23
24
25
26
27
@
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BILL
No. 27-13
28
(C)
set the matter for a hearing by a hearing examiner or' the
board itself, and consider and decide the complaint in the
same manner as if the Director had found reasonable
grounds to believe that a violation of this Article or
[Article] Articles X or XI occurred.
29
30
31
32
33
34
(3)
If the Director determines that there are reasonable grounds to
believe a violation occurred, the Director must attempt to
conciliate the matter under subsection (g).
35
36
37
38
*
27-8. Penalties and relief.
*
*
(a)
Damages and other relieffor complainant.
After finding a violation
of this Article or [Article] Articles X or XI, the case review board may
order the payment of damages (other than punitive damages) and any
other relief that the law and the facts warrant, such as:
39
40
41
42
43
44
45
*
(2)
*
*
equitable relief to prevent the discrimination or the violation of
[Article] Articles X or XI and otherwise effectuate the purposes
of this Chapter;
46
47
*
(4)
*
*
any other relief that furthers the purposes of this Article or
[Article] Articles X or XI or is necessary to eliminate the effects
of any discrimination prohibited under this Article.
48
49
50
*
ARTICLE XI.
27-67.
Findings and Definitions.
*
*
51
52
County Minimum Wage.
53
!ill
Findings.
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BILL
No. 27-13
54
55
56
ill
ill
ill
Many persons employed in the County are paid wages which are
insufficient to sustain minimum standards of living in the County.
Minimum standards of living in the County are higher than the
minimum standards of living in many other areas of the State.
Minimum wage standards in the County are necessary to:
CA)
promote the health and welfare of County residents;
safeguard employers and employees against unfair
competition;
(g
57
58
59
60
61
tID
62
63
64
increase the stability of industry in the County;
increase the buying power of employees in the County;
and
CD)
65
66
67
ill)
decrease the need for the County to spend public money
for the relief of employees who also live in the County.
®
Definitions.
As used in this Article:
Consumer Price Index
means the Consumer Price Index for All Urban
Consumers: All items
III
68
69
70
Washington-Baltimore, DC-MD-VA-WV
CCMSA), as published
Qy
the United States Department of Labor,
Bureau of Labor Statistics, or
~
successor index.
Director
means the Executive Director of the Office of Human Rights
and includes the Executive Director's designee.
Employ
means to engage
~
person to work for compensation.
Employee
means any person permitted or instructed to work or be
present
Qy
an employer in the County and who is an employee subject
to the minimum wage requirements of the Federal Act or the State Act.
Employer
means any person, individual, proprietorship, partnership,
joint venture, corporation, limited liability company, trust, association,
71
72
73
74
75
76
77
78
79
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BILL
No. 27-13
80
81
82
or other entity that employs
2.
or more persons in the County. Employer
does not include the United States, any State, or any local government.
Federal Act
means the federal Fair Labor Standards Act of 1938, as
amended.
83
84
85
Health insurance
means insurance coverage that is part of an employer
benefit package that
lli!Y§
for medical expenses incurred
!IT
an employee
and an employee's family either
paying the care provider directly.
86
87
88
89
!IT
reimbursing
the employee or
!IT
State Act
means the Maryland Wage and Hour Law, as amended.
Wage
means all compensation that is due to an employee for
employment.
27-68.
Minimum Wage Required.
90
91
92
liD
County minimum wage.
Except as provided in Subsection {Q1 an
93
employer must
ill!Y
wages to each employee working in the County at
least the greater of:
94
95
ill
ill
ill
the minimum wage required for that employee under the Federal
Act;
the minimum wage required for that employee under the State
Act; or
the County minimum wage of $12 per hour, as adjusted under
Subsection (Q1less any health insurance credit under Subsection
96
97
98
99
100
101
102
103
104
105
106
hl
®
Annual adjustment.
The Chief Administrative Officer must adjust the
minimum wage rate required under Subsection (a)(3), effective July
2017, and July
L
1
of each subsequent year,
!IT
the annual average
increase, if any, in the Consumer Price Index for the previous calendar
year. The Chief Administrative Officer must calculate the adjustment to
CD
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BILL No. 27-13
107
108
109
110
111
112
the nearest multiple of
~
cents, and must publish the amount of this
adjustment not later than March
1
of each year.
(ill
Health insurance credit.
An
employer who provides health insurance to
any employee who works in the County may reduce the County
minimum wage payable under paragraph (a)(3) to any employee who is
eligible to receive health insurance
Qy
all or part of the per-employee
hourly cost of the employer's share of the premium for that insurance.
@
Exclusions.
The County minimum wage does not ill2lliYto an employee
113
114
115
116
117
who:
ill
ill
ill
27-69.
is exempt from the minimum wage requirements of the State or
Federal Act;
is
f!
tipped employee under the State Act; or
is subject to an opportunity wage under the State or Federal Act.
118
119
120
121
Enforcement.
A covered employee who was paid
f!
wage rate less than the County minimum
122
123
wage in violation of this Article may file
f!
complaint with the Director under Section
124
125
Sec. 2.
Transition.
Notwithstanding Section 27-68(a)(3), as added m Section 1, the County
minimum wage must be:
(a)
effective July 1, 2014, $7.25 per hour for an employee during the
employee's first 90 days of employment and $8.25 per hour beginning
on the employee's 91
st
day of employment;
(b)
effective July 1, 2015, $8.25 per hour for an employee during the
employee's first 90 days of employment and $9.75 per hour beginning
on the employee's 91
st
day of employment; and
126
127
128
129
130
131
132
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BILL No. 27-13
133
134
(c)
effective July 1, 2016, $9.75 per hour for an employee during the
employee's first 90 days of employment and $12.00 per hour beginning
on the employee's 91
st
day of employment.
135
136
137
Sec. 3.
Effective Date.
This Act takes effect on July 1,2014.
Approved:
138
139
Nancy Navarro, President, County Council
Date
140
Approved:
141
Isiah Leggett, County Executive
Date
142
143
This is a correct copy o/Council action.
Linda M. Lauer, Clerk ofthe Council
Date
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LEGISLATIVE REQUEST REPORT
Bill 27-13
Human Rights and Civil Liberties
DESCRIPTION:
County Minimum Wage
Dollar Amount
The Bill would establish a County minimum wage that must be paid
to certain employees working in the County for a private sector
employer. The Bill would also encourage an employer to provide
health insurance to its employees by providing a credit against the
County minimum wage based upon the cost per employee for the
insurance. If the State or federal minimum wage is greater than the
County minimum wage, an employer would still need to satisfy the
State or federal law.
The State and federal minimum wage of $7.25Ihour is insufficient to
support a full-time worker in the County.
To maintain a reasonable living wage for workers in the County
when the State and federal minimum wage is insufficient.
Human Rights Commission
To be requested.
To be requested.
To be requested.
To be researched.
Robert H. Drummer, Senior Legislative Attorney, 240-777-7895
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Class A civil citation and equitable relief.
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