Agenda Item 7A
April 12, 2016
Introduction
MEMORANDUM
April 8,2016
TO:
FROM:
County Council
M
~
Josh Hamlin, Legislative
Attome~
SUBJECT:
Introduction:
Bill 12-16, Human Rights and Civil Liberties - County Minimum
Wage - Amount - Annual Adjustment
Bill 12-16, Human Rights and Civil Liberties - County Minimum Wage - Annual
Adjustment, sponsored by Lead Sponsor Councilmember EIrich, and Co-Sponsors
Councilmembers Leventhal, Riemer and Navarro, is scheduled to be introduced on April 12. A
public hearing is tentatively scheduled for June 21 at 7:30 p.m.
Bil112-16 would:
increase the County minimum wage by a certain amount;
require the Chief Administrative Officer to adjust the County minimum wage rate
each year; and
generally amend the laws governing the minimum wage
Background
In 2013, the Council enacted Bill 27-13,
1
which established a County minimum wage for
private sector employees working in the County, unless the State or federal minimum wage is
higher. The County minimum wage established under Bill 27-13, as amended, is phased in over
several years. The rate was set at $8.40 per hour effective October 1, 2014, and increased to
$9.55 per hour on October 1, 2015.
It
is set to increase to $10.75 on July 1 of this year, and will
go to $11.50 per hour on July 1,2017. The County minimum wage does not apply to a worker
who is exempt from the State or federal minimum wage, is under the age of 19 years and is
employed no more than 20 hours per week, or subject to an "opportunity wage" under the State
or federal law. Employers of tipped employees may include in the computation of their wage
amount a "tip credit" not exceeding the County minimum wage less $4.00 per hour.
In
2014, the Maryland General Assembly enacted a law raising the State's minimum
wage from $7.25 to $10.10 per hour over four years, with incremental increases to $8.25 in 2015,
$8.75 in 2016, $9.25 in 2017, and $10.10 in 2018. The federal minimum wage is $7.25 hour and
County minimum wage law has been amended twice since being established by Bill 27-13. Bill 59-14
modified some ofthe effective dates for increases, and Bil124-15 modified the method for calculating the "tip
credit" allowed to employers oftipped employees.
1
The
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has not changed since 2009.
2
There is a nationwide effort to increase the minimum wage at the
federal, state, and local levels to $15.00 per hour, which has thus far had some success.
3
California and New York are currently in the process of enacting statewide laws that would
increase the minimum wage for at least some workers to $15.00 per hour over a period of years.
Bill 12-16 would extend the incremental increases set in County law to go up to $15.00
per hour effective July 1, 2020. Under the Bill's transition provisions, the County minimum
wage would increase to $12.50 in 2018, $13.75 in 2019, and $15.00 in 2020. Additionally, the
Bill would require, beginning in 2021, annual adjustments to the minimum wage by the annual
average increase, if any, in the Consumer Price Index for Urban Wage Earners and Clerical
Workers, CPI-W for the previous calendar year.
Legal
Authority
Montgomery County can set its own minimum wage by 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 12-16
Legislative Request Report
F:\LAW\BILLS\l612 Minimum Wage - Annual Adjustment\Intro Memo.Doc
Circle
#
1
4
showing the federal minimum wage rates from 1938-2009 is at
http://www.dol.gov!whd/minwage/cbalt.htm
3
A summary ofjurisdictions approving some fonn of$15 minimum wage is at
hnp':I/~Wjy.nelp"m:gl£ol1ten1l..\!RlQ_adslPR-Minimum-
WJ!g!!-
Year-EnJi:JJ..
,p..4!
2
A chart
2
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Bill No.
12-16
Concerning: Human Rights and Civil
Liberties - County Minimum Wage ­
Amount - Annual Adjustment
Revised:
0312912016
Draft No. _2_
Introduced:
April 12, 2016
Expires:
October 12, 2017
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _--:--:--_ _ _ _ _ __
Sunset Date: -:...:.No=n=e'---_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmember EIrich
Co-Sponsors: Councilmembers Leventhal, Riemer and Navarro
AN
ACT
to:
(1)
increase the County minimum wage by a certain amount;
(2) require the Chief Administrative Officer
to
adjust the County minimum wage rate
each year; and
(3) generally amend the laws governing the minimum wage
By amending
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Article XI. County Minimum Wage
Section 27-68
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Addedto 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 thefollowing Act:
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BILL
No.
12-16
1
2
Sec 1. Section 27-68 is amended as follows:
27-68.
(a)
Minimum Wage Required.
County minimum wage.
Except as provided in Subsection (b), an
3
4
employer must pay wages to each employee for work performed in the
County at least the greater of:
(1)
the minimum wage required for that employee under the Federal
Act;
(2)
the minimum wage required for that employee under the State
Act; or
(3)
(b)
[$11.50] $15.00 per hour.
5
6
7
8
9
10
11
12
Annual adjustment.
The Chief Administrative Officer must adjust the
minimum wage rate required under Subsection (a)(3), effective July
L
2021, and July
l3
14
1
of each subsequent year,
Qy
the annual average
increase, if any, in the Consumer Price Index for Urban Wage Earners
and Clerical Workers, CPI-W, or
§:
15
16
17
18
19
20
21
successor index, for the previous
calendar year. The Chief Administrative Officer must calculate the
adjustment to the nearest multiple of five cents, and must publish the
amount of this adjustment not later
than
March
1
of each year.
(Q)
Exclusions.
The County minimum wage does not apply to an employee
who:
(1)
is exempt from the minimum wage requirements of the State or
Federal Act;
22
23
24
(2)
is under the age of 19 years and is employed no more than 20
hours per week; or
25
26
27
(3)
[(
c)]@
is subject to an opportunity wage under the State or Federal Act.
Retaliation prohibited.
A person must not:
retaliate against any person for:
(1)
V
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BILL
No.
12-16
28
(A)
(B)
lawfully opposing any violation of this Article; or
filing a complaint, testifying, assisting, or participating in
any manner in an investigation, proceeding, or hearing
under this Article; or
29
30
31
32
33
34
(2)
obstruct or prevent enforcement or compliance with this Article.
Sec.2. Transition.
Notwithstanding Section 27-68, as amended in Section 1, the County
minimum wage, until July 1, 2020, must be the greater of the minimum wage
required under the Federal or State Act or:
(a)
(b)
(c)
effective July 1,2017, $11.50 per hour;
effective July 1,2018, $12.50 per hour;
effective July 1,2019, $13.75 per hour.
35
36
37
38
39
40
41
Sec. 3.
Approved:
Effective Date.
This Act takes effect on October 1, 2016.
42
43
Nancy Floreen, President, County Council
Date
44
45
Approved:
Isiah Leggett, County Executive
Date
46
47
This is a correct copy o/Council action.
Linda M. Lauer, Clerk of the Council
Date
o
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LEGISLATIVE REQUEST REPORT
Human Rights and Civil Liberties
DESCRIPTION:
Bi1l12-16
County Minimum Wage
-
Amount
-
Annual Adjustment
The Bill would increase the County minimum wage that must be paid
to certain employees working in the County for a private sector
employer or the County government to $15.00 per hour by 2020.
It
would also require annual adjustments to the County minimum wage
each year beginning in 2021.
The existing County minimum wage of $9.55 per hour, which will
increase to $10.75 on July 1 of this year and $11.50 on July 1,2017,
is insufficient to support a full-time worker in the County, and
existing law does not provide for annual increases based on inflation.
To maintain a reasonable living wage for workers in the County
when the State and federal minimum wage is insufficient.
Human Rights Commission, Office of Management and Budget,
Department of Finance
To be requested.
To
be
requested.
To be requested.
To
be
researched.
Josh Hamlin, Legislative Attorney, 240-777-7892
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITIDN
MUNICIPALITIES:
PENALTIES:
Class A civil citation and equitable relief.
F:\LAWlBILLS\16xx Minimum Wage· Annual Adjustment\LEGISLATIVE REQUEST REPORT.Doc