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ROCKVILLE – John Helm, owner of the Bethesda store Red Orchard, said a $15-per-hour minimum wage will serve a blow to his business’s bottom line.
Helm said he pays his part-time employees for 1,000 hours a year, so every dollar-per-hour increase will cost the business an additional $1,000 or more per year, “plus the additional, and considerable, payroll taxes.”
Despite the increased costs, he said he supports the minimum wage increase.
“I support increasing the minimum wage, just so that we can play a small part in a more equitable society,” Helm said.
The Montgomery County Council passed a $15 minimum wage bill in 2017, to be implemented during a period of a few years.
Meanwhile, the Maryland General Assembly is considering state legislation that would, if passed, gradually increase minimum wage in other parts of the state to $15 an hour. The bill concerns labor and employment, payment of wages and minimum wage and enforcement, and is also known as “Fight for $15,” according to the bill.
County Executive Marc Elrich spoke in support of House Bill 166 during a public hearing before the State House Economic Matters Committee Feb. 8.
Elrich said workers earning too low a wage to pay for their basic needs ends up costing the county money to aid them.
“I’m uninterested in bringing low-wage jobs to Montgomery County so I can (then) increase the amount of money I spend on food assistance, housing assistance and medical assistance,” Elrich told the committee. “That’s not a strategy for economic growth and that’s not a strategy for growing our tax base.”
Therefore, Elrich said he would only want businesses that pay their employees minimum wage or higher in the county.
Prince George’s County Executive Angela Alsobrooks spoke before the committee and said that she supports the bill as well.
Sandra Phillips, chief financial officer of Sunrise Safety Services, a traffic control company in Glen Burnie, told the Economic Matters Committee that employees whose wages would increase to $15 would earn less money overall because they would lose several benefits as a result of “Fight for $15.”
Though some employees who earn less than $15 an hour would have a wage increase, the employees who earn more than $15 currently would expect a wage increase as well, Phillips said. Sunrise Safety Services would then have to cut many benefits to be able to pay for the wages and associated costs. The company would also be unable to afford new equipment.
Sunrise Safety Services could not increase prices of their services to cover the costs because their customers are often state government workers, and state law would prohibit that.
“We are completely opposed to this bill,” Phillips said.
If the bill becomes a law, minimum wage would increase to $11 an hour in July, the beginning of the new fiscal year, according to the bill. It would then increase by a dollar per year until reaching $15 an hour in July 2023. Provisions for tipped employees would follow a different schedule, though still increasing during the next few years. Starting at $3.63 in July, by July 2026 the minimum wage for tipped employees would equal the state minimum wage of $15.
Additionally, the Fight for $15 bill includes points that would repeal provisions of the law that allow certain employers to pay certain employees a wage that is less than the state minimum wage, under select circumstances such as tipped employees. The bill would prohibit an employer from including a tip credit amount as part of the wage for certain employees.
According to the bill, a small business is composed of 50 employees or fewer.
The companion bill in the state senate is Senate Bill 280.
The Presidents of several chambers of commerce in the county signed a letter to the county council dated Feb. 6, saying they approve of the bill, with an amendment. They want the state bill to be amended so it is more like the county law. They agreed with the county in supporting the bill being passed. The presidents of the county chamber, the greater Bethesda chamber, the Gaithersburg- Germantown chamber, the Rockville chamber and the greater Silver Spring chamber signed the letter to the council.
“We believe the county must go beyond a position of support and join our Chambers in the position of ‘support with amendments,’ which will better conform the proposed legislation to county law, thereby alleviating any confusion on compliance for our businesses and nonprofits,” the presidents of chambers of commerce wrote.
For Helm, he wondered if the county could allow a two-tiered system based on age and hours worked, such as employees under 20-years-old who work fewer than 20 hours a week would earn at a lower rate.
“I suspect that at $15/hour, I won’t be too excited about hiring a 16-year-old Walter Johnson student to work part-time over the summer. (Sorry teenagers!),” he wrote in an email.
Delegate Diana Fennell (D-47A), who represents Prince George’s County, is sponsoring HB 166. More than a dozen state delegates representing Montgomery County are cosponsoring the bill.
Workers of several industries around the state, including health care and rural employees, as well as business owners will testify on Feb. 21 before the Senate Finance Committee in support of the measure.