OCEAN CITY — The House of Delegates on Wednesday approved on second reading a slightly watered down Maryland minimum wage increase bill, while rejecting an amendment introduced by a local delegate that would have included provisions specific to Ocean City.
On Tuesday, the House Economic Matters approved House Bill 295, or the Maryland Minimum Wage Act of 2014, after approving several amendments. The approved bill would increase the state’s minimum wage from the current $7.25 per hour to $10.10 per hour over three years as proposed. However, the bill approved by the committee eliminates the Consumer Price Index (CPI) provision that would have adjusted the minimum wage rate in out years to account for inflation and cost of living.
In addition, the committee-approved bill would include an exemption for restaurants and bars that gross less than $250,000 per year. In an issue near and dear to the resort area with its glut of seasonal hospitality businesses, the bill included an amendment that would freeze the minimum wage for tipped employees at the current $3.63, or 50 percent of the actual minimum wage. The initial version of the bill would have raised that percentage to 70 percent. However, the bill passed by committee would still require employees to make up the difference for employees who fall short of the mandated minimum wage in tips.
With the Economic Matters Committee approving an amended version of the bill on Tuesday, the legislation had a hearing in front of the full House of Delegates on Wednesday, an amended version of which was approved on second reading. Several amendments were introduced and most were rejected, including one introduced by Delegate Mike McDermott (R-38B) that would have tailored the legislation specifically to Ocean City.
McDermott’s amendment would have defined a seasonal employee as a worker employed in Ocean City for no more than 120 days per calendar year. The amendment would allow Ocean City businesses to continue to pay certain seasonal employees at the current federal minimum wage of $7.25 per hour regardless of what changes the state makes in its minimum wage structure. However, McDermott’s amendment was rejected by a vote of 89-47.
McDermott argued Prince George’s County passed its own version of a minimum wage bill that would exempt seasonal employees at the Six Flag’s amusement park from any state-mandated increase from the current $7.25 and proposed a similar concession should be applied to seasonal employees in Ocean City.
“Everyone across the state is dealing with their own issues and everyone is dealing with their own different unemployment rates,” he said. “Counties who are dealing with their own individual unemployment rates should be able to decide what their minimum wage is. They should be able to decide for themselves whether it’s higher or whether it’s lower.”
McDermott argued the proposed wage hike would hurt small businesses and ultimately take away jobs at the beach.
“We struggle right now keeping these jobs available for these kids,” he said. “The Lower Shore is not recovering. The unemployment rate is still soaring. Our Ocean City businesses will lose out to competition in Delaware with Bethany and Rehoboth Beach and to competition in Virginia and North Carolina. Ocean City is our world-class resort and this state’s premier destination. The revenue from Ocean City paves a lot of roads in Baltimore City. The revenue from Ocean City does a lot for the State of Maryland.”
McDermott told his colleagues allowing employers in Ocean City to pay seasonal workers the current minimum wage is akin to Prince George’s County doing the same with its seasonal workers at Six Flags.
“The amendment that applies to Prince George’s County also holds true for Worcester, Wicomico, Somerset and all of Maryland’s counties,” he said. “The Prince George’s amendment was created to address young, seasonal workers from May to October. That’s the beach. If you can see it for a sector like Six Flags or Jolly Roger’s, if you can capture a vision for how minimum wage impacts that industry, can you not see how that impacts an entire region like Ocean City? I am telling you that you are driving up the costs for businesses, which will drive up the costs for everyone else. This is about creating an atmosphere where people can still afford to come and the employers can still afford to keep people there.”
The Ocean City business community has been keeping a close eye on the minimum wage debate in Annapolis and were generally pleased with some of the changes approved by the committee on Tuesday, particularly the elimination of the indexing for inflation and cost of living in out years and the amendments related to tipped employees.
“We have been working with our lobbyist on this bill and the specific provisions that the work group would propose,” said Ocean City Chamber of Commerce Executive Director Melanie Pursel. “We are happy about the CPI being removed as well as the minimum wage for tipped employees.”
Pursel said the resort business community endorsed a minimum wage structure tailored to regional issues.
“We were supportive of a regional tiered system where the maximum minimum wage would be based on the Maryland minimum living wage law,” she said. “It is definitely good to see the phasing in annually as well. However, the cost of living is much different in the rural areas.”
Several other amendments were rejected during the House hearing on Wednesday that would have had local impacts. One amendment rejected by the full House would have exempted businesses with less than 50 employees from the mandated minimum wage increase. Another amendment would have set that number at less than 101, but that too was rejected. Yet another amendment would have exempted businesses that gross less than $500,000 per year, but that was rejected. The version approved by the House on Wednesday set that threshold at $250,000.