Approval of Bill 12-16 makes Montgomery one of the
first jurisdictions in the nation with $15 minimum wage
ROCKVILLE, Md., January 17, 2017—The Montgomery County Council today approved Bill 12-16 that will gradually increase the County minimum wage to $15 per hour by 2020. Five amendments to the original bill were approved before the Council voted 5-4 to approve the amended bill, making Montgomery one of the first jurisdictions in the nation to approve a $15 per hour minimum wage.
Councilmember Marc Elrich was the lead sponsor of Bill 12-16 to increase the County minimum wage incrementally beyond the $11.50 per hour minimum, effective July 1, 2017, that is provided for under current law. Councilmembers Tom Hucker, George Leventhal, Nancy Navarro and Hans Riemer were co-sponsors. Those five voted to approve the amended bill. Councilmembers Roger Berliner, Nancy Floreen, Sidney Katz and Craig Rice voted against the amended bill.
The bill now goes to County Executive Ike Leggett for his signature.
More information about Bill 12-16 and its amendments can be found at:
http://tinyurl.com/zk7no4n .
Prior to the vote on the amended bill, the Council considered a proposal to conduct a study of the impact of increasing the minimum wage and delay voting on a Bill 12-16 until after the study was completed. The proposal to conduct the study was defeated by a 5-4 vote with Councilmembers Elrich, Hucker, Leventhal, Navarro and Riemer voting against conducting the study. Councilmembers Berliner, Floreen, Katz and Rice supported conducting a study.
As enacted, Bill 12-16 will:
- Extend the incremental increases set in County law to go up to $15 per hour effective July 1, 2020 for employers with 26 or more employees. Under the bill’s transition provisions, the County minimum wage for these employers would increase to $12.50 in 2018, $13.75 in 2019 and $15.00 in 2020.
- Require, beginning in 20212023, annual adjustments to the minimum wage by the annual average increase, if any, in the Consumer Price Index for urban wage earners and clerical workers for the previous calendar year.
Among the amendments approved was one proposed by Councilmembers Elrich and Leventhal that changes the minimum wage schedule for businesses employers with 25 or fewer employees so that they reach $15 per hour two years later than larger employers. The phase in schedule for those the smaller businesses employers will be $12 per hour effective July 1, 2018; $12.75 per hour on July 1, 2019; $13.50 per hour on July 1, 2020; $14.25 per hour on July 1, 2021; and $15 per hour on July 1, 2022.
Another amendment proposed by Councilmembers Elrich and Leventhal and approved would give the County Executive the ability to stop pause implementation of a scheduled increase if economic conditions worsen. The conditions that could trigger a pause are: if total private employment for Montgomery County decreases decreased by 1.5 percent over the period from April 1 to June 30 of the previous year; total private employment for Montgomery County decreased by 2.0 percent over the period from Jan. 1 to June 30 of the previous year; the Gross Domestic Product of the United States experiences negative growth for the preceding two quarters: or the National Bureau of Economic Research determines that the United States economy is in recession.
An amendment proposed by Councilmember Riemer and approved will require the County’s Office of Legislative Oversight to monitor the impact of increases in the County minimum wage and provide annual reports to the Council on the impacts.
“I can’t look at this issue any other way than from the bottom up,” said Councilmember Elrich. “With this increase, we make it clear that we believe that an honest day’s work should result in an honest day’s pay and not leave a working person mired in poverty. Helping people lift themselves out of poverty benefits all of us.
“Raising the minimum wage means that the tens of thousands of families that will be affected. They will now be more likely to meet their basic needs, and enjoy greater stability. And local businesses will benefit when more of our residents have more money to spend in the local economy. I understand the concerns of some business owners, and we have extended the phase in period for small businesses until 2022, and we have provided provisions for a pause in the increases when economic conditions warrant it. But I do not think that those concerns should trump what is a fundamental social justice issue: people who work should be able to make a living, put a roof over their heads and feed and clothes their families.
“When FDR put forward the original minimum wage, it was explicitly to insure a wage that meets basic needs. Sadly, that link between the minimum wage and meeting basic needs has been shattered and it is time to recouple wages to the original purpose of the minimum wage. I thank my colleagues and all the many people who worked for and supported this bill.”
Councilmember Leventhal said: “I am proud to vote for Bill 12-16 this morning. Today’s vote sends the message that I stand with hard working families struggling to get by on poverty wages.”
Councilmember Navarro said: “I was proud to co-sponsor and cast my vote to increase the minimum wage to $15 an hour. As we celebrated the life of Dr. Martin Luther King, Jr., yesterday, I was reminded of his quote: ‘The arc of the moral universe is long, but it bends toward justice.’ While increasing the minimum wage will not solve the vexing issue of poverty, it is an important step forward in alleviating income inequality of our County.”
Council Vice President Riemer said: “I was very proud to cosponsor and cast my vote for a $15 minimum wage in Montgomery County. This is one of the most expensive places to live in the U.S. A higher minimum wage will help the poorest among us make ends meet, and when workers have more money in their pockets the local economy has stronger consumers—which is good for everyone. I am also grateful to my colleagues for supporting my amendment calling for the Council to receive an annual report on the local economy so that we can carefully track the impact of our minimum wage. No policy is without tradeoffs, but there are also great costs if we fail to act, including children living in poverty, economic insecurity and growing inequality. These are the problems that I am most compelled to address.”
Councilmember Floreen said: “I certainly support increasing the minimum wage to $15 nationally or even regionally. However, for Montgomery County to raise our minimum wage when surrounding jurisdictions do not raise theirs risks putting us at a competitive disadvantage for job creation. What people want most is a job, and we need to make sure we have an environment that supports job growth.”
Councilmember Katz said: “My vote against this bill was a reflection of my concern that we do not have enough information to pass the best legislation possible. I sincerely believe that the best path forward for this complex discussion would have been to get more information based on Montgomery County’s unique situation. I am very concerned that we do not know the full scope of the impact on the County budget and I am worried that there will be some businesses that will close and others will be forced to decrease the hours of some employees. I think the best way to have avoided this would have been to base our decision on more information—this would not have delayed implementation at all.”
In 2013, the Council enacted Bill 27-13 that established a County minimum wage for County employees and private sector employees working in the County, unless the state or federal minimum wage is higher. Bill 24-15 modified the method for calculating the “tip credit” allowed to employers of tipped employees.
The County minimum wage established under Bill 27-13 is being phased in over several years. The rate was set at $8.40 per hour effective Oct. 1, 2014, and increased to $9.55 per hour on Oct.1, 2015. It increased to $10.75 on July 1, 2016, and will go to $11.50 per hour on July 1, 2017.
The County minimum wage does not apply to a worker who is exempt from the state or federal minimum wage, is under the age of 19 years and is employed no more than 20 hours per week or subject to an “opportunity wage” under the state or federal law. Employers of tipped employees may include in the computation of their wage amount a “tip credit” not exceeding the County minimum wage less $4.00 per hour.
The District of Columbia enacted a law in June 2016 increasing the minimum wage to $15 by 2020. California and New York have enacted statewide laws that will increase the minimum wage for at least some workers to $15 per hour over a period of years. In the November 2016 election, voters in Maine, Arizona and Colorado all voted to increase the minimum wage to $12 an hour by 2020, and Washington State voters approved a raise to $13.50 an hour by that year. In Arizona, voters in the City of Flagstaff approved an additional minimum wage initiative to increase the minimum wage in Flagstaff to $15 an hour in 2021.
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