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Overview - Living Wage for State Service Contracts

In 1994, Baltimore was the first city to enforce the Living Wage Law. Since then, over 140 cities throughout the United States have joined forces and created a Living Wage movement in their areas, and the numbers continue to grow both in the U.S. and on international soil.

Living Wage Rate

Current Living Wage Rate
The Living Wage rates change each year based upon the changes in the Consumer Price Index. New rates are published at the beginning of the State’s fiscal year in July and become effective 90 days from the end of the state fiscal year in June. View exemptions.

Therefore, effective 12:01 a.m. on September 29, 2024, the Living Wage rates will be adjusted to $16.63 per hour in Tier 1 areas except for Montgomery County. Effective July 1, 2024, large employers (those with 51 or more employees) must pay the Montgomery County minimum wage rate of $17.15 per hour. For all non-Tier 1 areas, employees must be paid at least $15.00 per hour.

NOTE: Due to increases in the Maryland minimum wage rate that exceed the Living Wage rate, offerors, contractors and subcontractors in Tier 2 should be aware of the current Maryland minimum wage rates and planned increases to that rate in the future.

State law requires that contractors and subcontractors pay each covered employee at least the higher of the State minimum wage or the minimum Living Wage rate established for the applicable Tier area.

State procurement law requires compliance with all State laws including the State Minimum Wage Law. Under the Maryland law, an employee must be paid at least the current minimum wage. Offerors should be mindful of the projected increases in the minimum wage rate as well as potential changes to the living wage rate as the minimum wage rate may exceed the living wage rate for Tier 2 contracts in future years.

Area Breakdown

  1. Tier 1: Anne Arundel County, Baltimore City, Baltimore, Howard, Montgomery, and Prince George’s Counties
  2. Tier 2: Any county in the State not included in the Tier 1 area for each hour you work on that contract.

Living Wage Law

What is the Living Wage Law?
The Living Wage Law establishes and enforces wage standards for workers from private businesses receiving contracts or subsidies from local governments. Living Wage requires a minimum hourly rate that is sufficient to provide the necessities and comforts essential to an acceptable standard of living earned by an individual working full-time on a state project valued at $100,000 or more if the contractor has more than 10 employees, or $500,000 if the contractor has 10 or fewer employees.

When this law was passed, the Maryland legislature required the Commissioner of Labor and Industry to adjust the wage rates each year based on the Consumer Price Index and to allow certain reductions to the wage rates.

Services Covered Under the Law
Under the Living Wage Law, services covered include maintenance services and information technology services. However, services NOT included are construction, construction-related services, architectural and engineering services, energy performance contracts, supplies (including commodities and printing), real property, or the purchase of goods.

Services Exempt from the Living Wage Law

For additional information, contact:
Division of Labor and Industry
Living Wage for State Service Contracts

10946 Golden W Drive Suite 160
Hunt Valley, MD 21031
Ayuda en Español: Jose Ruiz, 410-767-2370