When you’re looking for an entry-level job, understanding the minimum wage is crucial. It gives you a chance to compare opportunities more effectively. As well as better determine your compensation needs. If you’re curious about the minimum wage in Maryland, here’s what you need to know.
What Is a Minimum Wage?
A minimum wage is a dollar amount reflecting the lowest per-hour compensation rate a company can legally offer covered nonexempt employees. The majority of the workforce is considered covered nonexempt, though there are some exceptions.
There can be several kinds of minimum wages. First, there is one set at the federal level. This is the lowest amount any company can pay workers anywhere in the United States. Currently, that is set at $7.25 per hour for non-tipped workers and $2.13 an hour for qualifying tipped employees.
Second, there are state and city minimum wages. These can set a higher dollar amount for employers in their area. However, a lower amount is not enforceable, as the federal rate then applies by default.
What Is the Minimum Wage in Maryland?
As of January 1, 2021, the minimum wage in Maryland is $11.75 per hour for companies with at least 15 employees. Tipped employees – defined as those who earn over $30 in tips per month – must be paid at least $3.63 per hour. However, if their tips don’t bring them up to the equivalent of $11.75 per hour, the employer is required to make up the difference.
There is a different minimum wage for smaller businesses. For companies with fewer than 15 employees, the minimum wage is $11.60 per hour.
Maryland is also going to have future minimum wage increases. A new minimum wage goes into effect on the first of each year until the minimum wage reaches $15.00 per hour in 2025 for companies with 15 or more workers.
It’s important to note that some municipalities in Maryland have higher minimum wages. For example, the minimum wage in Montgomery County reached $15.00 per hour ($4.00 per hour for tipped workers) on January 1, 2021.
Is the Maryland Minimum Wage a Living Wage?
A living wage isn’t the same thing as a minimum wage. Generally, a living wage is considered to be the minimum amount a person needs to earn per hour while working full-time to support their household. Since household size plays a role, the living wage does vary depending on a household’s composition.
In Maryland, the living wage for a single person without children is $17.25 per hour. For a household of two adults and two children, the living wage is $35.41 if just one person works and $23.40 per hour each if two adults are working.
There is no household composition where the Maryland minimum wage qualifies as a living wage. Additionally, there are some situations where the minimum wage in Maryland doesn’t reach the poverty wage.
A poverty wage is the amount of money a person would need to earn per hour while working full-time to cross over the poverty level threshold based on their household size. For example, in a household of two adults and two children with just one adult working, the poverty wage is $12.60 per hour. That falls below the Maryland minimum wage currently.
How do you feel about the minimum wage in Maryland? Do you think it’s enough, or would you like to see it go higher? Share your thoughts in the comments below.
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