December 4, 2013

Montgomery County minimum wage might be tricky to enforce

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By Glynis Kazanjian

Glynis@MarylandReporter.com

Montgomery County Council member Nancy Navarro addresses a minimum wage rally.

Montgomery County Council member Nancy Navarro addresses a minimum wage rally

Enforcing Montgomery County’s new minimum wage law raising it to $11.50 an hour over several years may be much trickier than the council bargained for when it rushed through passage of the bill last week.

The Montgomery County Council provided that the county’s Office of Human Rights could enforce an area of law that it has no experience with, but then it told the county executive to delegate that enforcement to a state agency.

But an official at the Department of Labor, Licensing and Regulation (DLLR), which oversees enforcement of the state minimum wage, said that can’t be done under current law.

“The Department of Labor and Licensing is committed to enforcing the state’s minimum wage law for every mom and dad who is willing to work hard and play by the rules,” said Maureen O’Connor, DLLR director of communications. “However, the department enforces laws in the Annotated Code of Maryland not county ordinances.”

The only remedy to having a state agency enforce the county law would be to change state law.

Need to change state law

Montgomery County Council member George Leventhal

Montgomery County Council member George Leventhal

Montgomery’s law will be take effect next October, so a legislative fix would have to occur during the 2014 legislative session when legislators plan to take up their own minimum wage bill.

As a default, the County Council budgeted approximately $350,000 annually for three investigator positions to handle complaints. But Councilman George Leventhal said, “It is my hope that the Office of Human Rights never enforces this.”

The state labor department currently has five investigators who primarily handle wage theft to take minimum wage complaints, but most of the work is passed off to the U.S. Department of Labor.

In 2013, the state received 39 minimum wage complaints, O’Connor said. State residents can also call the federal government directly. Both the state and federal minimum wage is $7.25 an hour.

In the last 10 days, Montgomery County, Prince George’s County and Washington, D.C. have passed laws increasing their minimum wage to $11.50 per hour by 2017.

Council members have been told that the hourly rate in possible state legislation would be closer to $10.00. CORRECTED 12/5, 10:30 a.m. and may not be adjusted for inflation as the county rates are.Montgomery County Seal (This provision was removed from the Montgomery County bill.)

Potential legal challenges

The council’s legal staff believes Montgomery County has the authority to enact a local minimum wage bill. But potential problems were brought up during the council’s voting session on the bill that could lead to legal challenges down the road.

“There’s a body of case law dealing with the authority of charter counties to enact what we call local laws,” Senior Legislative Attorney Robert Drummer said. “That’s the extent of the county’s home rule authority. A local law affects only the county that’s enacting it.  Only one county.  If it affects more than one county , then it becomes a public general law, and that’s something that the state can do but the county can’t.”

Council members and their legal team debated at length how to structure the legislation so that it remained a lawful local law. Companies that work and are based in Montgomery are covered,  Drummer said. Trying to enforce the local wage on Montgomery County businesses that work in other counties or outside companies that do some work in Montgomery could make the law a public general law.

“Some might call it legal fuzziness,” Drummer said.

Drummer cited a 10-year old lawsuit brought by Bally’s Total Fitness Holiday, Inc. against the county for regulating “local” contracts for health facilities. The court ruled that because Bally’s had locations outside the county, the law could not be considered a local law.

Gigi Goodwin, Montgomery County Chamber of Commerce

Gigi Godwin, Montgomery County Chamber of Commerce

Chamber and Republicans object

GiGi Godwin, president and CEO of the Montgomery Chamber of Commerce, said she would prefer local firms focus on doing business rather than have to navigate the intricacies of the new law.

“The minimum wage is frankly a national issue, and that’s why our County Council brought it up,”  Godwin said. “Congress hasn’t acted on it. That’s disconcerting to a lot of people. If it’s dealt with at the national level, then you don’t have disparity between communities. It creates a lot of confusion when you think about the practical applications.”

The county law would not apply to employees of municipalities, which could choose to opt-out.

The Montgomery County Republican Party flatly opposes the new law.

“The Montgomery County Republican Party condemns the misguided act of the Montgomery County Council’s raising the minimum wage to $11.50 by 2017,” said newly elected Montgomery County Republican Party Chairman Michael Higgs. “The intentions sound noble, but the real-world result will be less jobs to go around and even more government dependency.”

  • MD Observer

    In its attempts to establish wage consistencies, the county has created countless inconsistencies.

    For example, the law applies only to businesses incorporated in the County who employ County residents. So
    County businesses employing workers living outside the county would be exempt, as are businesses incorporated outside the County who pay workers residing in the County. Employees working for Montgomery County are exempt, as are employees of the Federal government, municipal governments and state employees working in the County. Six cities are exempt because they’ve opted out of implementing County ordinances on auto pilot. Workers receiving tips are exempt. And on and on…..

    Enforcement is largely from complaints lodged with the County. Inconsistencies cited above are guaranteed to create many “false positive” non-enforcements that needlessly consume taxpayer resources.

    In addition, this ordinance is riddled with unintended consequences and is demonstrably NOT assured of achieving the
    intended result, at least an objective reading of the prevailing economists’ studies. It’s no wonder conservatives cannot comprehend the workings of liberal minds..

  • joe

    All Montgomery County liberals (not business owners) should be charged a per head fee to pay for the proposed increase in the minimum wage.

  • reader

    Ah yes, the logic free zone of Montgomery County seeking to and accomplishing creating more harm than good. If these clowns would only go out and start a business instead of trying to tell others how to run theirs they would have a greater appreciation of the turmoil they create with their silliness.