New minimum wage for small businesses in Howard County takes effect

Employees at Howard County’s smallest businesses are getting a raise in July thanks to a pandemic-era law that established incremental hikes to the minimum wage beginning in 2022.

The wage floor is now $16 an hour for county businesses with 14 or fewer employees, along with nonprofits and entities that provide home and health services and food services. It’s the final adjustment spelled out in the law before the county’s local minimum wage increases shift to being set by the consumer price index in 2027.

The law puts Howard County’s minimum wage ahead of the state as a whole. It’s currently $15 per hour. Neighboring Montgomery County has taken a similarly aggressive approach. Beginning Wednesday, Montgomery’s rate increased by 45 cents to $15.95 for small businesses and by 35 cents to $18 an hour for businesses with more than 50 employees.

Some businesses welcome the increase.

Brian England, owner of BA Auto Care in Columbia, credits his employees for the shop’s success.

“As we see every day on the shop floor, fairly compensated employees provide better service, are more productive and build better relationships with customers, leading to more return customers and referrals,” England said in a statement shared by Business for a Fair Minimum Wage. “Raising the minimum wage lifts workers and businesses alike and will drive more economic growth that small businesses need right now.”

England and others, including labor unions, community advocates and residents, supported the bill in 2021.

A political coordinator for 1199SEIU United Healthcare Workers East, which represents 10,000 people in Maryland, testified that the benefits of the bill far outweigh drawbacks.

“Workers are consumers, and if people are not earning a living wage, they cannot spend money at local businesses because they are living paycheck to paycheck,” said Djawa Hall, a political coordinator for the union, in a letter to County Council. “By raising wages, this would enable low-wage workers to support small businesses better.”

The Maryland Center on Economic Policy estimated the gradual increases would benefit up to 40,000 Howard workers, representing a quarter of the workforce.

The law also compelled the county to make changes to its pay rate. At the time of its passage, the jurisdiction reported that it employed 536 people — mostly in the Department of Recreation and Parks — who earned less than $15 per hour.

Critics of the bill said it would strain some small businesses and lead to unintended consequences in some sectors.

Republican Councilman David Yungmann, who represents the county’s rural west, attempted unsuccessfully to add an exemption to the bill for farms.

Several Howard County agricultural operators testified that their family farms operate on razor-thin margins and a wage increase would devastate them.

The Restaurant Association of Maryland also opposed the measure, pointing out that the industry is facing substantial cost increases and supply chain issues.