Friday, November 17, 2017

Montgomery County, Maryland passes $15/hour minimum wage. Who is affected, what are the caveats, and will it last?

On Monday, November 13, Montgomery County Executive Isiah Leggett signed into law the County Council’s bill increasing the County-wide minimum wage to $15.00 per hour for certain employers by 2021. Under Montgomery County Council Bill 28-17, as enacted, the law provides a transition period to allow for the annual incremental increase of the hourly minimum wage paid by “large” employers, which are defined as those who employ 51 or more employees. Previous incremental adjustments to the County’s minimum wage did not account for the size of the employer.

For large employers, the County minimum wage increases from $11.50 effective July 1, 2017 to $12.25 per hour on July 1, 2018; to $13.00 per hour effective July 1, 2019, to $14.00 per hour effective July 1, 2020, and to $15.00 per hour effective July 1, 2021. The law provides that the minimum wage paid in any given year shall be the greater of that provided under the County law or under the prevailing state or federal law.

Regardless of the size of the employer, beginning July 1 in the year after the $15.00/hour minimum wage is reached, the County’s Chief Administrative Officer must adjust the minimum wage each subsequent July 1 by the annual average increase in the Consumer Price Index (CPI) for Urban Wage Earner and Clerical Workers for Washington-Baltimore, during the previous calendar year. For mid-sized and small employers, if the annual average increase under the CPI is less than $.50, then the annual increase shall be one percent of the minimum wage required for the previous year, up to a total increase of $.50.

Who is exempt from the County’s $15.00/hour minimum wage increase?


The County minimum wage does not apply to an employee who is under 19 years of age and is employed for fewer than 20 hours per week, or to an employee who is exempt from the minimum wage requirements under state or federal law.

Moreover, employers with fewer than 51 employees will have a longer transition period to implement the minimum wage.

What are the caveats to the County’s minimum wage increase?


The public policy behind the legislation to provide an improved standard of living for otherwise low-wage, hourly earners in Montgomery County is apparent from the exclusion of employees 19 years and younger who are employed for fewer than 20 hours a week. Still, during their first six months of employment, employers retain discretion to pay employees under 20 years old a wage equal to 85% of the County minimum wage.

Mid-size employers are defined as those who employ between 11 and 50 employees or as an employer who employs 11 or more employees and either has 501(c)(3) tax-exempt status or provides certain home health-care services whose revenues are derived at least 75% in part through Medicaid programs. Mid-sized employers benefit from a longer transition period, and they have until July 1, 2023, rather than 2021, to implement the minimum wage. The minimum wage for mid-sized employers increases from $11.50 effective July 1, 2017 to $12.00 per hour effective July 1, 2018, and then to $12.50 per hour by July 1, 2019; to $13.25 per hour by July 1, 2020; to $14.00 per hour by July 1, 2021; to $14.50 per hour by July 1, 2022; and finally to $15.00 per hour by July 1, 2023.

Small employers, or those employers with 10 or fewer employees, will have until 2024 to implement the $15.00 per hour minimum wage. The minimum wage for small employers increases from $11.50 effective July 1, 2017 to $12.00 per hour effective July 1, 2018 and then incrementally increases on July 1 of each year to $12.50 per hour in 2019; $13.00 per hour in 2020; $13.50 per hour in 2021; $14.00 per hour in 2022; $14.50 per hour in 2023; and finally to $15.00 per hour in 2024.

The number of employees at an employer is determined by the employer’s average number of employees per calendar week during the preceding calendar year for all weeks during which at least one employee worked for compensation. For employers that did not have employees in the preceding calendar year, the number of employees must be calculated based on the average number of employees who worked for compensation per calendar week in the first 90 calendar days of the current year in which the employer engaged in business, effective as of the time the employer first becomes subject to the Act and remains subject to any section of the Act.

Will the law last?


The County Executive’s signature of the bill into law stands in contrast to his veto of similar legislation passed by the County Council in January 2017, under which the $15.00 minimum wage would be effective by July 1, 2020. Under previous law that was enacted in 2014, also under Mr. Leggett’s leadership, the County’s $9.25 per hour minimum wage, which was effective July 1, 2016, increased to $11.50 per hour effective July 1, 2017.

Yet in January 2017, Mr. Leggett’s reported concern was that the legislation would put Montgomery County at a “competitive disadvantage…compared to…neighboring jurisdictions.” By comparison, the $9.25 per hour minimum wage in Prince George’s County increased to $11.50 per hour on July 1, 2017. In the District, the current minimum wage of $12.50 is on track to increase incrementally to $15.00 per hour by July 2020, the same date as the proposed legislation in Montgomery County. In his January 2017 veto message, Mr. Leggett also commissioned a study of the economic impact of a $15.00 per hour minimum wage on the County’s public, private, and non-profit sectors and pushed for a revised bill that extended the wage increase’s phase-in to 2022, and which included an exemption for small businesses and youth workers.

On the whole, most of the conditions Mr. Leggett sought are not satisfied by or do not support the current law. Indeed, the study commissioned by the County Executive fails to make any finding about the impact of the minimum wage increase on non-profit employers in Montgomery County. Opponents of the legislation in Montgomery County, as with those opposed to the $15.00 per hour minimum wage trend, have long argued that such sharp wage increases lead to layoffs and overburden businesses. For example, the study projected that approximately 47,000 jobs would be lost by 2022 as a result of the County’s increase in the minimum wage. Out of those jobs, approximately 43,500 of the lost positions were expected to be for low-wage workers. And far from exempt, under the new law, small businesses must implement the increase to $15.00 per hour by 2024, just three years after large employers are required to do so in four years’ time by 2021.

So why enact this law now? Interestingly, and perhaps as an acknowledgement of the risks the $15.00 per hour minimum wage mandate presents so soon after a recession and as a nod to the business interests in the County, the law provides for the suspension of the minimum wage increases in the event economic conditions do not support a minimum wage increase. Between 2018, and annually until 2024, the County’s Director of Finance must certify to the County Council and Executive whether any of the four following conditions are met:

  1. whether total private employment for Montgomery County decreased by 1.5% from April 1 to June 30 of the previous year, as compared to the total private employment in June and the total private employment in April, as reported by Maryland’s State Department of Labor Licensing, and Regulation’s (DLLR’s) Quarterly Census of Employment and Wage data series;
  2. whether total private employment for the County decreased by 2% from January 1 to June 30 of the previous year, compared to total private employment in June to total private employment in January, as reported by DLLR;
  3. whether the gross domestic product of the United States, as published by the U.S. Department of Commerce, has experienced negative growth for the preceding two quarters; and
  4. whether the National Bureau of Economic Research has determined that the United States economy is in recession.
The law provides that in any given year, if any of these conditions is satisfied, the County Executive may temporarily suspend the minimum wage increases for a year, and if the Executive does so, implementation of the minimum wage increases that follow the temporary suspension must be postponed by an additional year.

By signing the law with this provision in the third year of his third and final term as County Executive, Mr. Leggett appears to receive the benefit of embracing and signing a $15.00 per hour minimum wage into law, while simultaneously leaving the door open for his successor to suspend its implementation if economic conditions do not support it.

Written by Puja Gupta.

This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Tuesday, November 7, 2017

Small Steps Toward Greater Whistleblower Protections

On October 26, 2017, the Dr. Chris Kirkpatrick Whistleblower Protection Act of 2017 became law. Officially referenced as Pub. L. 115-73, this statute had tragic origins: Dr. Kirkpatrick was fired from the Tomah Veterans Affairs Medical Center after he blew the whistle on how his patients were receiving disturbingly high doses of drugs that prevented him from providing them with proper psychiatric treatment. After Dr. Kirkpatrick gathered his personal belongings, he secured care for his dog, wrote to tell his girlfriend he loved her, and committed suicide. The Veterans Administration never investigated Dr. Kirkpatrick’s death.

In response, Congress enacted the following changes:
  1. Under Sec. 102, when the Merit Systems Protection Board (“MSPB”) stays an action proposed against a potential whistleblower, including probationary employees, the head of the employing agency must give priority to any request for a transfer by the employee. Additionally, the Comptroller General of the United States must submit a report on the subject of retaliation against probationary employees.
  2. Under Sec. 103, a new prohibited personnel action is added to forbid agencies from accessing the medical records of employees or applicants in furtherance of the original 13 prohibited personnel practices.
  3. Under Sec. 104, if a supervisor is found to have retaliated against a whistleblower, the head of the employing agency must, at minimum, propose a 3-day suspension for a first offense, and must propose the supervisor’s removal from federal service after a second offense. 
  4. Under Sec. 105, if a whistleblower commits suicide, the head of the agency must refer this information, as well as any information in its possession relating to the circumstances of the suicide, to the Office of Special Counsel, who will examine whether the whistleblower had been retaliated against and who will take any action it deems appropriate within its authority.
  5. Under Sec. 106, agencies must provide training on handling complaints of whistleblower retaliation to all new supervisors and to all supervisors on an annual basis.
  6. Under Sec. 107, the heads of covered agencies are responsible for preventing retaliation against whistleblowers and for ensuring that employees are informed of their rights and the available avenues for relief. 
The Dr. Chris Kirkpatrick Whistleblower Protection Act of 2017 became law after passing unanimously in both houses of Congress. The Senate Report notes that Special Counsel Lerner cited numerous examples of the VA failing to discipline officials found responsible for posing significant risks to public health and safety or engaging in other misconduct. Special Counsel Lerner added that this lack of discipline “stand[s] in stark contrast to disciplinary actions taken against VA whistleblowers . . . for minor indiscretions or for activity directly related to the employee’s whistleblowing.”

Astoundingly, this is not the first time that it took the death of a whistleblower to instigate much needed change: we have previously written about the Kate Puzey Peace Corps Volunteer Protection Act of 2011, which was enacted after Peace Corps Volunteer Kate Puzey was brutally murdered in retaliation for her whistleblowing about sexual assaults.

Even now, our intelligence community whistleblowers are exempt from many protections that other federal employees enjoy. On the very day that the Dr. Chris Kirkpatrick Whistleblower Protection Act of 2017 became law, the Federal Circuit issued Parkinson v. Department of Justice, which denied preference-eligible (veteran) FBI employees who face retaliation for whistleblowing any recourse to the MSPB. Parkinson is a stark reminder that while Congress has made small steps towards greater protection, more remains to be done. Let it be before any more lives are lost.

By Nina Ren



This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.