SB 107
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Enrolled - Revised
Senate Bill 107 (Senator Hayes)
Finance Economic Matters
Labor and Employment - Secure Maryland Wage Act
This bill requires an employer to pay specified wages and benefits to a covered employee
beginning January 1, 2022. A “covered employee” is a nonexempt employee under the
federal Fair Labor Standards Act (FLSA) who performs work at a “heightened security
interest location,” which is defined as Baltimore-Washington International Thurgood
Marshall Airport (BWI Marshall Airport) or Pennsylvania Station in Baltimore
(Penn Station), subject to specified exceptions.
Fiscal Summary
State Effect: General fund expenditures increase by $213,800 in FY 2022 for the
Maryland Department of Labor (MDL). Out-year expenditures reflect annualization and
elimination of one-time costs. The State is not subject to the bill as an employer, but
Transportation Trust Fund (TTF) expenditures for service contracts at the two affected
facilities may increase beginning in FY 2025, as discussed below. Reporting requirements
can be handled with existing budgeted resources. Revenues are not materially affected.
(in dollars) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
Revenues $0 $0 $0 $0 $0
GF Expenditure 213,800 190,200 195,000 201,300 207,800
SF Expenditure 0 0 0 - -
Net Effect ($213,800) ($190,200) ($195,000) ($201,300) ($207,800)
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: The bill does not materially affect local revenues. The bill does not apply to
local governments as employers. The circuit courts in Baltimore City and Anne Arundel
County can likely handle any increase in litigation with existing resources.
Small Business Effect: Meaningful.
 Analysis
Bill Summary: The bill reports findings of the General Assembly and states its purpose
as setting a higher wage standard for employees working at a heightened security interest
location to promote the safety, security, and welfare of State residents.
Covered Employees
The bill exempts covered employees from the Maryland Wage and Hour Law but does not
exempt them from the Living Wage Law. The bill applies to a covered employee of an
employer only if at least 50% of the covered employee’s time during any workweek is
performed at a heightened security interest location. The bill does not diminish specified
collective bargaining rights or a right that is granted under FLSA.
Employees covered by the bill do not include individuals employed by retail
establishments, food service facilities, or rental car agencies at heightened security interest
locations. Construction companies and airlines also are not affected.
Required Minimum Wages
Specifically, an employer must pay a covered employee an hourly wage rate of at least:
 $13.50 for calendar 2022;
 $14.25 for calendar 2023;
 $15.00 for calendar 2024; and
 $16.00 for calendar 2025 and beyond.
Beginning January 1, 2026, an employer must also pay a covered employee an additional
supplement benefit rate with a value of at least $1.00 per hour, which is calculated by
(1) applying the full supplement benefit to assist in covering the employee’s share of health
or other benefits, excluding paid leave; (2) applying a portion of the supplement benefit to
assist in covering the employee’s share of health or other benefits, excluding paid leave
and paying the balance in cash; or (3) paying the entire supplement benefit in cash. An
employer must pay overtime wages of at least 1.5 times the usual hourly wage required
under the bill for each hour over 40 hours that a covered employee works during
one workweek. An agreement between an employer and a covered employee to work for
less than the wage required under the bill is void and is not a defense to an action taken
under the bill. An employer may not include a tip credit amount as part of the wage of a
covered employee whose duties include providing passengers with wheelchair assistance,
including a wheelchair agent or a passenger service agent. An employer of such a covered
employee must allow the covered employee to receive tips and retain all tips received.
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Enforcement
The Commissioner of Labor and Industry within MDL enforces the bill’s provisions as
specified and may conduct an investigation on receipt of a written complaint by an
employee. The commissioner may enter a place of employment as specified. The bill
specifies how the commissioner must administer the bill. The bill includes employer
posting and recordkeeping requirements. Specified records or statements that the
commissioner or an authorized representative of the commissioner obtains are confidential
and may only be shown to the commissioner or a court.
A person aggrieved by a regulation adopted by the commissioner, or by an order to pay
wages issued by the commissioner, may file a complaint in circuit court within 60 days
after the publication date of the regulation or order to pay wages to have it modified or set
aside. The bill describes court proceedings to address the complaint.
If an employer pays less than the wages required, the covered employee may bring an
action against the employer to recover (1) the difference between the wage paid to the
employee and the wage required; (2) an additional amount equal to the difference as
liquidated damages; and (3) legal fees. The court must award these differences in wages,
damages, and counsel fees if the court determines that an employee is entitled to recovery.
However, if an employer shows to the satisfaction of the court that the employer acted in
good faith and reasonably believed that the wages paid to the employee were not less than
the required wages, then the court must award liquidated damages of an amount less than
the difference in wages or no liquidated damages. Upon written request, the commissioner
may take an assignment of the claim in trust for the covered employee, ask the
Attorney General to bring an action on behalf of the covered employee, and consolidate
two or more claims against an employer.
An employer may not pay or agree to pay less than the required wages, hinder or delay the
commissioner or an authorized representative in enforcing the bill, take adverse action as
specified in the bill, or violate any other provision of the bill. A covered employee may not
make a groundless or malicious complaint to the commissioner or authorized representative
or in bad faith bring or testify in an action or proceeding related to the bill.
A person who violates provisions of the bill is guilty of a misdemeanor and on conviction
is subject to a fine of up to $1,000. An employer may not be convicted unless the evidence
demonstrates that the employer had knowledge of the relevant complaint, testimony, or
action for which the prosecution for retaliation is sought.
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Reporting Requirements
The Port of Baltimore must compare wage rates and benefit rates of employees, by
employee category or job classification, working at the Port of Baltimore with the wage
rates and benefit rates of employees working at the Norfolk International Terminals of the
Port of Virginia and at the Port of Philadelphia and report its findings to the Governor and
the General Assembly by January 1, 2022.
The Maryland Aviation Administration must compare wage and benefit rates for all
employees working at BWI Marshall Airport, by employee category, job classification, and
employment sector, with the wage and benefit rates for employees working at
Ronald Reagan Washington National Airport and Dulles International Airport and report
its findings to the Governor and the General Assembly by January 1, 2022.
Current Law: For a description of Maryland’s enforcement of minimum wages, please
see the Appendix – Maryland Wage and Hour Law.
Living Wage
Chapter 284 of 2007 made Maryland the first state to require State service contractors to
pay their employees a “living wage.” For fiscal 2008, the living wage was set at $11.30 in
Anne Arundel, Baltimore, Howard, Montgomery, and Prince George’s counties and
Baltimore City (Tier 1). It was set at $8.50 for all other areas of the State (Tier 2). The
living wage rates are adjusted annually for inflation by the Commissioner of Labor and
Industry within MDL. Effective September 28, 2020, the Tier 1 living wage is $14.42 and
the Tier 2 wage is $10.83. Montgomery and Prince George’s counties and Baltimore City
have local living wage ordinances that apply to their procurement of services.
Federal Fair Labor Standards Act
Similar to State law, FLSA generally requires that workers be paid a minimum hourly wage
and that overtime compensation be paid to employees who work more than 40 hours in a
week. However, Section 13(a)(1) of FLSA provides an exemption from both minimum
wage and overtime pay for employees employed as bona fide executive, administrative,
professional and outside sales employees. Section 13(a)(1) and Section 13(a)(17) also
exempt certain computer employees. To qualify for exemption, employees generally must
meet certain tests regarding their job duties and be paid on a salary basis at not less than
$684 per week. Job titles do not determine exempt status.
State Revenues: General fund revenues are not materially affected from any increase in
tax revenues or to the extent the Office of the Attorney General is awarded reasonable
counsel fees and other costs.
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State Expenditures:
Administrative Costs
The bill does not apply to the State as an employer, but it does apply to contractors and
other employers that provide a variety of services at the two locations in the bill. It creates
additional responsibilities for MDL’s Division of Labor and Industry by requiring
employers to pay a specified prevailing wage to certain employees at BWI Marshall Airport
and Penn Station. These changes are expected to increase the number of inquiries and
complaints related to payment of those wages and increase field investigations related to
the anti-retaliation provisions of the bill. MDL cannot fully absorb the additional workload
within existing resources and requires additional staff to respond to the increase in inquiries
and complaints prompted by the bill.
Thus, general fund expenditures increase for MDL by $213,782 in fiscal 2022, which
accounts for the bill’s October 1, 2021 effective date. This estimate reflects the cost of
hiring one MDL wage and hour investigator to conduct outreach, respond to inquiries,
investigate complaints, and enforce the new requirements; one civil rights officer to
investigate anti-retaliation cases; and one half-time assistant Attorney General to handle
legal proceedings. It includes salaries, fringe benefits, one-time start-up costs (including
programming expenses), and ongoing operating expenses.
Positions 2.5
Salaries and Fringe Benefits $130,440
One-time Information Technology Expense 44,900
Other Operating Expenses 38,442
Total FY 2022 Administrative Expenditures $213,782
Future year expenditures reflect full salaries with annual increases and employee turnover
and ongoing operating expenses.
Procurement Costs
Contractors that provide direct services to the State at the two locations (e.g., security,
building maintenance, landscaping, etc.) likely pass on any increase in their labor costs to
the State. The Maryland Department of Transportation expects contract costs paid from
TTF to increase by at least $750,000 in fiscal 2022. However, the Department of
Legislative Services notes that both locations in the bill are in Tier 1 jurisdictions under
the Living Wage Act, so service contractors in those locations are already generally
required to pay their employees at least $14.42 per hour. That rate exceeds the rates
established by the bill for both calendar 2022 and 2023. Inflation adjustments through
calendar 2024 likely bring the Tier 1 living wage rate close to the $15.00 wage rate required
SB 107/ Page 5
by the bill for that year. Thus, any effect on State service contracts in the two affected
locations is expected to be negligible at least through fiscal 2024. TTF expenditures may,
however, increase beginning in fiscal 2025 to pay the higher wages, which exceed both
minimum wage and living wage rates in current law.
Small Business Effect: Except for exempt employers under the bill, small businesses in
the State that employ low-wage workers at BWI Marshall Airport or Penn Station who are
nonexempt from FLSA and who do not have direct contracts with the State experience
significant increases in their labor costs due to the bill that are not passed on to the State.
The impact is even greater for small businesses that employ tipped employees and for
employers that pay subminimum wages or are exempt from being required to pay
employees the State minimum wage under the Maryland Wage and Hour Law.
Additional Information
Prior Introductions: SB 62 of 2020, a similar bill, received a hearing in the Senate
Finance Committee, but no further action was taken. Its cross file, HB 1410, received a
hearing in the House Economic Matters Committee, but no further action was taken.
Another similar bill, SB 794 of 2019, received a hearing in the Senate Finance Committee,
but no further action was taken. Another similar bill, HB 629 of 2019, received a hearing
in the House Economic Matters Committee and was later withdrawn.
Designated Cross File: HB 685 (Delegate Valderrama) - Economic Matters.
Information Source(s): Office of the Attorney General; Judiciary (Administrative Office
of the Courts); Department of Budget and Management; Department of General Services;
Maryland Department of Labor; Maryland Department of Transportation; Military
Department; Department of Legislative Services
Fiscal Note History: First Reader - January 27, 2021
rh/mcr Third Reader - March 25, 2021
Revised - Amendment(s) - March 25, 2021
Enrolled - May 10, 2021
Revised - Amendment(s) - May 10, 2021
Revised - Clarification - May 10, 2021
Analysis by: Michael Sanelli Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 107/ Page 6
 Appendix – Maryland Wage and Hour Law
The Maryland Wage and Hour Law is the State complement to the federal Fair Labor
Standards Act, which specifies minimum wage and overtime requirements for employers
and employees in the State. Chapters 10 and 11 of 2019 increase the State minimum
wage rate for employers with 15 or more employees in increments until the full phase-in
of $15.00 per hour on January 1, 2025. For employers with 14 or fewer employees, the
wage rate reaches full phase-in on July 1, 2026.
The Board of Public Works (BPW), however, may temporarily suspend one scheduled
increase in the State minimum wage for one year between October 1, 2020, and
October 1, 2024, if it determines that the seasonally adjusted total employment is negative
as compared with the previous six-month period. If total adjusted employment is negative,
BPW may also consider the recent performance of State revenues in making its
determination.
The Acts specify that, unless the federal minimum wage is set at a higher rate, the
State minimum wage for employers with 15 or more employees is as follows:
 $11.75 per hour as of January 1, 2021;
 $12.50 per hour as of January 1, 2022;
 $13.25 per hour as of January 1, 2023;
 $14.00 per hour as of January 1, 2024; and
 $15.00 per hour as of January 1, 2025.
The State minimum wage for an employer that employs 14 or fewer employees is as
follows:
 $11.60 per hour as of January 1, 2021;
 $12.20 per hour as of January 1, 2022;
 $12.80 per hour as of January 1, 2023;
 $13.40 per hour as of January 1, 2024;
 $14.00 per hour as of January 1, 2025;
 $14.60 per hour as of January 1, 2026; and
 $15.00 per hour as of July 1, 2026.
An employer may pay 85% of the State minimum wage rate to employees younger than
age 18.
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The Maryland Wage and Hour Law and minimum wage requirements do not apply to
certain categories of employees, including those defined as administrative, executive, or
professional; certain seasonal employees; part-time employees younger than age 16;
salesmen and those who work on commission; an employer’s immediate family; drive-in
theater employees; employees training in a special education program in a public school;
employees of an establishment that sells food and drink for on-premises consumption and
has an annual gross income of $400,000 or less; employees employed by an employer who
is engaged in canning, freezing, packing, or first processing of perishable or seasonal fresh
fruits, vegetables, poultry, or seafood; and certain farm workers.
Under Maryland’s Wage and House Law, an employer is required to pay an overtime wage