TOP TIP: New Minimum Wage Rates for 2023 in the Mid-Atlantic and for Federal Contractors/Subcontractors

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The federal minimum wage remains $7.25, with a tipped wage rate of $2.13; however, most states in the mid-Atlantic region have implemented higher minimum wage rates. (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.) The minimum wage rate in several states, as well as that for certain federal contractors and subcontractors, increases on January 1, 2023, as noted below.

  • Maryland’s minimum wage is subject to an annual increase, with the next increase coming on January 1, 2023 – $13.25 per hour for employers with 15+ employees, and $12.80 for those with 14 or fewer employees. The tipped wage rate remains at $3.63 per hour. Employers must also display the current minimum wage poster, which is available here.
  • Howard County, Maryland passed a law this past Spring, raising its minimum wage in scheduled annual increases to $16.00. Effective January 1, 2023, the rate is $15.00 per hour for employers with 15 or more employees, and $13.25 per hour for those with under 15 employees. Like Maryland, the county tipped rate is $3.63 per hour. The required poster is available here.
  • Also, New Jersey is increasing its rate for most employers to $14.00 per hour. Seasonal, and small (fewer than 6 employees) employers in New Jersey are subject to a reduced rate of $12.70 per hour, while agricultural employers have a new rate of $11.70. New Jersey’s tipped wage rate remains at $5.13. The required poster is available here.
  • In Delaware, the rate increases to $11.75 per hour. The tipped wage rate remains at $2.23, just slightly higher than the federal rate. The required poster is available here.
  • Virginia’s minimum wage rate is increasing to $12.00 per hour. The tipped wage remains at the federal rate. Unlike the other states discussed here, Virginia does not have a poster requirement, but an optional poster is available here.

In addition, the minimum wage rate for certain federal contractors or subcontractors depends on whether their contracts were entered into prior to January 30, 2022. The covered (sub)contracts are 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 (although this last category is not currently being enforced with regard to contracts entered into on or after January 30, 2022) . There is a required poster, available here.

  • For contracts entered into prior to January 30, 2022, the required wage rate increases to $12.15 per hour for workers performing work on or in connection with covered contracts, with a tipped rate of $8.50 per hour. The required poster (which has yet to be updated) will be available here.
  • For new, renewed, or extended contracts that are entered into on or after January 30, 2022, the wage rate is $16.20 per hour, with a tipped rate of $13.75 per hour.

This is also a good time to remind employers of the applicable wage rates in other states and local jurisdictions throughout the Mid-Atlantic region, some of which have minimum wage rates above the federal rate:

  • Montgomery County, Maryland: $15.65 per hour for employers with more than 50 employees, $14.50 for those with 11-50 employees, and $14.00 for the remaining smallest employers. The tipped employee rate is $4.00 per hour. The next scheduled increase takes place on July 1, 2023. Our November 30, 2017 E-Update provides more detail on this law. The required poster is available here.
  • District of Columbia: $16.10 per hour, with a tipped wage rate of $5.35 per hour. The next scheduled increase will take place on July 1, 2023. The required poster is available here.
  • West Virginia: $8.75 per hour, with a tipped wage rate of $2.62 per hour. The required poster is available here.
  • Pennsylvania: Applies the federal rate.

Employers should ensure that they are complying with the applicable minimum wage rates, and also updating any required posters as necessary.