TOP TIP: 2021 Brings New Minimum Wage Rates in the Mid-Atlantic and for Federal Contractors and Subcontractors
Although the federal minimum wage remains $7.25, most states in the mid-Atlantic region have implemented higher minimum wage rates. Several of them increase on January 1, 2021, as noted below.
Maryland’s minimum wage is subject to an annual increase, with the next increase coming on January 1, 2021 – from $11.00 to $11.75 per hour. The tipped wage rate remains at the federal level of $3.63 per hour. (The tipped wage rate for tipped employees, together with any tip credit, must meet the minimum wage. Employers are responsible for making up any shortfall.) Employers must also display the current minimum wage poster, which has yet to be updated on the website, but will be available here.
As we discussed in our April 10, 2019 E-lert on new Maryland laws, this increase comes as the result of legislation that gradually increases the state rate to $15.00 over the next several years. Different schedules of increases apply depending on the size of the employer. Our E-lert provides further details about the law.
Also, New Jersey is increasing its rate to $12.00 per hour (from $11.00). Seasonal, and small (fewer than 6 employees) employers in New Jersey are subject to a reduced rate of $11.10 per hour (up from $10.30), while agricultural employers remain at $10.30. New Jersey’s tipped wage rate is increased to $4.13 (from $3.13). The required poster is available here.
In addition, the minimum wage rate for certain federal contractors or subcontractors increases to $10.95 per hour (from $10.80) for workers performing work on or in connection with covered contracts, with a tipped rate of $7.65 per hour (from $7.55). The covered (sub)contractors are those with one of the following: construction contracts covered by the Davis-Bacon Act; service contracts covered by the Service Contract Act; concession contracts (e.g., contracts to operate souvenir shops in national parks or restaurants in federal buildings); and contracts in connection with federal property or land under which services are offered to federal employees, their dependents, or the general public. The required poster (which has yet to be updated) will be available here.
This is also a good time to remind employers that many other states and local jurisdictions have minimum wage rates above the federal rate, including the following throughout the Mid-Atlantic region:
- Montgomery County, Maryland: $14.00 per hour for employers with more than 50 employees, $13.25 for mid-sized and certain other employers, and $13.00 for small employers. The next scheduled increase takes place on July 1, 2021, to $15.00 per hour for employers with more than 50 employees, $14.00 for mid-sized and certain other employers, and $13.50 for small employers Our November 30, 2017 E-Update provides more detail on this law. The required poster is available here.
- Prince George’s County, Maryland: The county’s minimum wage rate of $11.50 per hour was higher than the state rate in 2020; however, as of January 1, 2021, the increased state rate will apply. The required Wage-Hour Abstract poster is available
- Delaware: $9.25 per hour. The required poster is available here.
- District of Columbia: $15.00 per hour, with a tipped wage of $5.00 per hour. The required poster is available here.
- West Virginia: $8.75 per hour. The required poster is available here.
- Virginia: Although Virginia currently uses the federal wage rage, the minimum wage will increase to $9.50 on May 1, 2021 pursuant to a law enacted earlier in 2020, which we discussed in our April 2020 E-Update in an article on the numerous changes to Virginia’s employment laws.
- Pennsylvania: Applies the federal rate.
Employers should ensure that they are complying with the applicable minimum wage rates, and also updating the required posters as necessary.