Gov. Martin O'Malley's proposed increase in Maryland's minimum wage to $10.10 cleared its first hurdle Monday night as a House committee approved the bill and rejected a proposal to set a different standard for rural areas.
The House Economic Matters Committee voted 13-8 to send the measure – with significant changes -- to the full House.
Before doing so, it amended the bill to eliminate a provision calling for the minimum wage to be increased automatically to keep pace with inflation after reaching $10.10 on Jan. 2017. The state's current minimum wage is the federal level of $7.25. The move keeps the question of whether and when to enact future increases in the General Assembly's hands.
The committee also delayed the proposed three-step increase by six months. Instead of taking effect in July, the first-phase increase to $8.20 will take effect next Jan. 1. Increases to $9.15 and then $10.10 would follow the next two New Year's Days.
The panel turned down an amendment by Del. David D. Rudolph, a Cecil County Democrat, that would have created a two-tier system with a an $8.20 minimum in Maryland's rural counties. Delegates from rural counties argued that the cost of living in counties outside the Baltimore and Washington metropolitan areas was lower and that businesses in those area could not afford the higher minimum
The restaurant industry received a significant break as the panel agreed to freeze the minimum wage for tipped workers at $3.63. Under the governor's bill, it would have been a percentage of the higher minimum wage. Chairman Dereck E. Davis, a Prince George's County Democrat, said Maryland will still have a higher minimum for tipped restaurant workers than any of its surrounding states. Restaurant will still be required to make up the difference between what employees make in tips and the minimum wage if it falls short.
The committee agreed to exempt small businesses with gross sales of less than $250,000 but balked at setting the threshold at $500,000.
Prince George's and Montgomery counties, which have adopted local minimum wages of $11.50, will be allowed to keep their higher standards under the bill. Delegates rejected an amendment by De. Kelly M. Schulz of Frederick County that would have barred counties from adopting minimums higher than the statewide rate.
The panel also rejected an amendment, also offered by Rudolph, that would have broadened the exemption for agricultural workers. But Six Flags and other seasonal amusements parks got a break as the committee agreed to an exemption.
Some delegates objected to the exemption, contending that it gave big corporations a break that smaller businesses would not receive. But Davis said Six Flags is a major employer in that county that faces stiff competition from Kings Dominion in Virginia and Hersheypark in Pennsylvania.
Del. Richard K. Impallaria, a Republican who represents Baltimore and Harford counties, was disgruntled that Six Flags got an exemption while the businesses he sought to exempt – athletic facilities such as golf courses and gyms – did not.
"The big corporate guys get a break. The small guy gets kicked in the teeth," he said.
An earlier version of this article misstated a rate to which the minimum wage would increase. The Baltimore Sun regrets the error.