Maryland Minimum Wage: Rates, Tip Credit, and Counties

A restaurant owner in Silver Spring called me after a payroll audit went badly. She had eleven employees, she was paying every one of them the Maryland state minimum of $15.00 an hour, and she was certain she was compliant. Her restaurant sits in Montgomery County, where an employer with eleven people owes a county rate, not the state one. The gap had been running for months across her whole staff.

That is the shape of the Maryland problem. The state rate has not moved since it reached $15.00, so employers stop watching it. Meanwhile three counties run their own schedules. Two of them adjust for inflation every year, and two moved their rates on July 1, halfway through the calendar year. Nothing about the state number tells you what you owe in Bethesda or Columbia.

So this page is a rate sheet, not an essay. It gives you the state rate, the three county rates above it, the tipped cash wage, the exemptions, and what to change the day a rate rises, with the effective date attached to every figure. For sick leave, pay transparency, final paychecks, and the rest of employing people in this state, use the Maryland HR compliance guide.

What You Owe Per Hour Right Now

The Maryland minimum wage is $15.00 an hour for every employer in the state, regardless of headcount, and it has been since January 1, 2024. The Maryland Department of Labor states it in a single line on its minimum wage and overtime page: most employees must be paid at least the Maryland State Minimum Wage Rate of $15 per hour.

The same rate for every employer size matters because Maryland used to run two tracks. Employers with 14 or fewer employees had a slower schedule under the state wage law. The Fair Wage Act of 2023 pulled both tracks to $15.00 on the same date, and Labor and Employment section 3-413 now sets that single rate.

If your payroll system still holds a small-employer rate, it is wrong and has been for more than two years.

Those are the only local rates in Maryland. The state labor department lists three jurisdictions with a minimum wage of their own, and Baltimore City is not among them, so employers there pay the state $15.00. The county rate follows the place where the work is performed, which means an employer headquartered outside Maryland can still owe a Montgomery County rate for a single remote worker in Wheaton.

When the Next Increase Lands

No increase to the Maryland state rate is scheduled. The state wage law sets $15.00 and stops, with no automatic cost-of-living raise attached, so the statewide figure moves only when the General Assembly passes a bill and the governor signs it. Plan payroll on $15.00 until that happens.

Bills do get filed. House Bill 1479 in the 2026 session would have raised the state rate to $18.00 for large employers by 2028, extended it to small employers by 2029, and indexed it to inflation afterward. The sponsor withdrew it in March 2026 before the committee voted on it. Nothing was enacted in its place.

County rates are the opposite: they move on a calendar whether or not anyone votes. Montgomery County adjusts every July 1 by the consumer price index for urban wage earners (CPI-W) in the Washington region, rounded to the nearest five cents, under Section 27-68 of the county code.

Howard County ties its rate to the consumer price index for all urban consumers (CPI-U), with annual adjustments starting in January 2027. Prince George's County adjusts each January 1 by the Washington-Arlington-Alexandria CPI-U under bill CB-088-2024, with the yearly increase capped at 5 percent.

In practice, a Maryland employer with staff in one of these counties gets one predictable budget event per year and one unpredictable one. The county adjustment arrives on schedule with a published figure. The state change arrives only from the legislature, with a lead time set by the bill.

Tipped Cash Wage and the Tip Credit

Maryland allows a tip credit, which means tips can cover part of the minimum wage you owe. Under Labor and Employment section 3-419, you must pay a tipped employee at least $3.63 an hour in cash, and cash plus tips must reach the applicable minimum wage. A tipped employee is someone who customarily and regularly receives more than $30 a month in tips.

At the state rate, the maximum credit is the arithmetic gap: $11.37 an hour. The credit is not a discount on the wage, though. If tips run thin in a given workweek, you make up the difference in cash that week.

Restaurant employers using a tip credit carry an added duty, subject to the related regulations. Each pay period, they must give every tipped employee a written or electronic wage statement showing the effective hourly rate (employer-paid cash wages plus tips) for the tip credit hours worked in each workweek of that period.

Montgomery County is the outlier again. Its cash floor is $4.00 an hour rather than $3.63, and county code section 27-69(d) requires employers of tipped employees to file a wage report with the county Office of Human Rights within 30 days after the end of each quarter. That filing is easy to miss because nothing in state law resembles it.

The Three County Rates

Montgomery, Howard, and Prince George's are the three Maryland counties with their own minimum wage. Each one applies to work performed inside the county, so the rate travels with the job site rather than with your business address or your employee handbook.

Montgomery County is the highest in the state and the only one with a size ladder: $18.00 for 51 or more employees, $16.50 for 11 to 50, and $15.95 for 10 or fewer, all effective July 1, 2026.

Montgomery's prior-year rates were $17.65, $16.00, and $15.50, so the jump is real money on a full-time schedule. The mid-size and small rates climb by CPI-W plus up to 1 percent each July until they catch the large-employer rate.

Howard County finished its phase-in on July 1, 2026, when smaller employers stepped from $15.50 to $16.00 and joined everyone else. Every employer doing business in Howard County with one or more employees now pays $16.00, and CPI-U adjustments begin in January 2027. Prince George's County pays $15.30, effective January 1, 2026, under the indexing bill its council passed in November 2024.

Baltimore City and Baltimore County

Baltimore is not one of the three. The minimum wage in Baltimore City and in Baltimore County is the Maryland rate of $15.00 an hour, because neither jurisdiction sets a floor of its own for private employers. The Baltimore City code tells employers in the city to pay at least the rate required by the federal Fair Labor Standards Act, and the higher state figure overtakes it.

What Baltimore City does run is a living wage law, which is easy to mistake for a minimum wage. It applies to employers performing work under covered city service contracts, not to private employers generally. The rate reached $17.17 an hour on July 1, 2026, and it adjusts every July 1. The Baltimore City Wage Commission enforces it alongside the city prevailing wage law.

So a Baltimore restaurant owes $15.00. A cleaning firm working a city building under a covered service contract owes the living wage for the employees on that contract. Those are two different rules, and only one of them is a minimum wage.

How Employer Size Is Counted

Montgomery County sorts employers by headcount: 51 or more employees is large, 11 to 50 is mid-size, and 10 or fewer is small. Recount before each July 1 adjustment so every hour lands on the right tier.

Two kinds of employer are treated as mid-size even at 51 or more employees. The first is a 501(c)(3) organization, which stays mid-size at any headcount of 11 or more. The second is a home health or community-based services provider that draws at least 75 percent of gross revenue from state and federal Medicaid programs.

Howard County keeps a parallel definition: 14 or fewer employees, 501(c)(3) organizations, Medicaid-funded home health providers, and food service facilities of any size all counted as smaller employers during the phase-in. Since both tiers now sit at $16.00, the definition no longer changes the number, though it remains in the ordinance.

Industry Carve-Outs and Exemptions

Maryland has no fast-food minimum wage and no healthcare minimum wage. The carve-outs in this state run the other direction: instead of raising the floor for one industry, they take certain employers and roles out of the wage and hour law, in whole or in part. The table shows which exemptions reach the minimum wage itself and which touch only overtime.

Fast Food, Healthcare, and Agriculture

No Maryland law sets a separate wage for fast food workers. That model belongs to other states, and the fast food wage rules that get quoted in national coverage are California's, not Maryland's. A quick-service restaurant here pays the same rate as the hardware store next door, adjusted only for the county it sits in.

Healthcare works the same way, with one wrinkle. There is no state healthcare minimum wage, but both Montgomery and Howard County place Medicaid-funded home health and community-based service providers in their lower employer tier, which during a phase-in year can mean a lower county rate for the same job title.

Agriculture gets the broadest treatment: certain agricultural employees are exempt from the state minimum wage and overtime entirely, and agricultural workers who are covered get overtime only after 60 hours in a week rather than 40. Seasonal operators get only half a break: amusement and recreational establishments must pay the required minimum wage rate, because their carve-out is from overtime, not from the wage.

Youth and Training Wage

Maryland state law has one youth rate and no training wage. An employer may pay an employee under 18 years of age 85 percent of the state minimum wage, which is $12.75 an hour at $15.00. That is the only reduced rate in the state wage statute.

State law has no 90-day training wage, no learner rate, and no probationary rate for adults. The federal youth opportunity wage of $4.25 an hour for the first 90 days cannot be used here, because where both laws apply the employee gets the higher floor, and Maryland's is far higher.

Employees under 16 who work no more than 20 hours a week are a separate case. Under section 3-403 they are exempt from the state minimum wage outright, though child labor rules and work permits still apply to them.

Howard County applies the same 85 percent to its own rate, which is $13.60 against the $16.00 county wage. Montgomery County takes a different route with its own opportunity wage: 85 percent of the county rate for an employee under 20 during the first six months of employment. Workers under 19 on no more than 20 hours a week fall outside the Montgomery rate altogether.

Prince George's County draws the line by hours. The state labor department's poster for the county shows a minor working 20 or more hours a week at the full $15.30, and only a minor on fewer weekly hours at the state youth rate of $12.75.

Poster Requirements

Every Maryland employer must post the Maryland Minimum Wage and Overtime Law notice, which states on its face that employers are required by law to post this information. The state's Employment Standards Service also lists a Notice to Tipped Employees among the required postings, and it goes up wherever a tipped employee works, whether or not you take a tip credit.

Montgomery, Howard, and Prince George's counties each have their own version of the wage poster, and the state labor department hosts all of them in English and Spanish as free downloads. If you operate in one of those counties, post the county version, because the county figure is what your workers are owed.

Record keeping sits next to the posting duty. Section 3-424 requires pay records to be kept for at least three years in or about the place of employment, which is stricter about location than most people expect.

How Maryland Sits Against the Federal Rate

The federal minimum wage is $7.25 an hour and has not moved since July 24, 2009, as the US Department of Labor state wage tables show. Maryland sits $7.75 above it. Where both laws cover an employee, the higher rate wins, so $7.25 is not a number a Maryland employer pays on an ordinary shift.

The federal figure still matters in exactly one place: the exemption table above. An employee carved out of the Maryland wage and hour law is not automatically carved out of the federal Fair Labor Standards Act, which runs its own coverage tests. If that employee is individually covered by the FLSA, the federal $7.25 becomes the floor rather than nothing at all.

What to Do the Day a Rate Rises

A rate change is a payroll project, not a memo. In Maryland the counties give you a fixed date and a published number, so the work is entirely schedulable. Run it in this order.

The piece employers skip is the last one. A poster showing a stale rate is the first thing an investigator photographs, and it converts a payroll question into a documented notice failure. Keeping rate changes, notices, and acknowledgments together in one system is exactly the kind of small recurring task FirstHR was built to hold for teams without a dedicated HR person.

Frequently Asked Questions

What is the Maryland minimum wage right now?

It is $15.00 an hour for every employer, regardless of size, effective January 1, 2024. The old slower schedule for employers with 14 or fewer employees ended on that date, so any small-employer rate still sitting in your payroll system is out of date. Three counties require more: Montgomery at $18.00, $16.50, or $15.95 depending on employer size, Howard at $16.00, and Prince George's at $15.30.

Do I pay the state rate or the county rate?

Whichever is higher for the place the work is performed. If your employee works in Rockville, the Montgomery County rate applies even when your office sits in Baltimore. If your employee works in Baltimore City, the state $15.00 applies, because Baltimore has no local rate of its own. For staff who split time across counties, the rate follows the hours worked in each place, so track work location on the timesheet.

How much can I count as a tip credit?

The gap between the cash wage you must pay and the applicable minimum wage: $11.37 statewide, since the cash floor is $3.63 and the rate is $15.00. In Montgomery County the cash floor is $4.00. The credit only holds if tips actually close the gap in that workweek. When they do not, you pay the difference in cash.

Is the state rate going up next year?

Nothing is scheduled. Maryland has no indexing mechanism, so the state rate changes only through legislation. A 2026 bill that would have taken it to $18.00 with inflation indexing was withdrawn by its sponsor before a committee vote. County rates, by contrast, adjust annually and will keep moving on their own calendars.

Can I pay a teenager less than the full rate?

You may pay an employee under 18 years of age 85 percent of the state minimum wage, which is $12.75 an hour. That is the only reduced rate in state law, which has no training wage or learner rate. The federal youth wage is unusable here because the higher state floor applies whenever both laws cover the job. Montgomery County also has a county opportunity wage for workers under 20 in their first six months on the job.

Which poster do I have to hang?

The Maryland Minimum Wage and Overtime Law notice, in every workplace, plus a Notice to Tipped Employees wherever tipped staff work. Employers in Montgomery, Howard, and Prince George's County post the county version of the wage poster instead of the plain state one. All versions are free downloads from the state labor department in English and Spanish.

What is the minimum wage in Baltimore?

$15.00 an hour, the state rate. Neither Baltimore City nor Baltimore County has a minimum wage of its own for private employers, so the city code simply points at the federal floor and the higher Maryland figure overtakes it. Baltimore City does run a living wage for covered city service contracts, which reached $17.17 an hour on July 1, 2026 and is enforced by the Baltimore City Wage Commission. That binds contractors on those contracts, not employers generally.

My restaurant grosses under $400,000. Am I exempt?

You may be exempt from the state wage and hour law, and that is narrower than being exempt from everything. Establishments serving food and drink on the premises with gross receipts under $400,000 a year appear on the state exemption list, but the federal Fair Labor Standards Act runs separate coverage tests, and a covered employee is still owed $7.25 an hour federally. County ordinances apply on their own terms as well. Have a Maryland employment attorney confirm this one before relying on it.