Maryland 2014 Legislative Session Wrap-Up

The 2014 Legislative Session adjourned at midnight on Monday, April 7, 2014.  During this year’s session, a number of bills were introduced that had a potential impact on small businesses in Maryland in general, and specifically on businesses in the construction industry. The most notable of these bills, which was passed by the legislature and signed by the Governor, is the Maryland Minimum Wage Act of 2014 (HB 295/SB 331).  There were many revisions to this bill right up until the last minute before it was finalized.  With certain very specific exceptions, The Maryland Minimum Wage Act of 2014 sets the State minimum wage rate as follows: For the six (6) month period beginning January 1, 2015 the minimum wage rate will be $8.00 an hour

  • For the twelve (12) month period beginning July 1, 2015, the minimum wage rate will be $8.25 per hour
  • For the twelve (12) month period beginning July 1, 2016, the minimum wage rate will be $8.75 per hour
  • For the twelve (12) month period beginning July 1, 2017, the minimum wage rate will be $9.25 per hour
  • For the twelve (12) month period beginning July 1, 2018, the minimum wage rate will be $10.10 per hour

The vote on this bill was entirely on party lines with strong support from the Democrats and strong opposition from the Republicans.  Some of the strongest supporters of the Floor Covering Association, including Senator Allan Kittleman (R – Howard Co.), Senator David Brinkley (R – Carroll & Frederick Co.), Senator Jim Mathias (R- Somerset, Wicomico, & Worchester), Delegate Warren Miller (R- Howard Co.), Delegate Susan Krebs (R- Carroll Co.), Delegate Justin Ready (R – Carroll Co.), Delegate Kelly Schulz (R- Frederick Co.), and others opposed this bill. Another bill of significance that was passed this session is the Prevailing Wage – Applicability (HB 727/ SB 232).  As with the Minimum Wage Act of 2014, this bill was significantly amended before it was passed.  If it had passed as it was originally written, it would have eliminated the State funding thresholds entirely on school construction projects and would have made any school construction project that used even $1 of State funding, a prevailing wage project. As amended, the Prevailing Wage – Applicability bill provides that a “public body” for purposes of the prevailing wage laws, includes the construction of an elementary or secondary school for which 25% or more of the money used for construction is State money.  Previously, the threshold was 50% so this does represent a compromise over the original language of the bill.  As with the minimum wage bill, the vote on the Prevailing Wage – Applicability bill was also divided on party lines with Democrats voting in favor, and Republicans opposing. In addition to the bills that passed this session, equally important, if not more so, were some of the bills that did not pass this session.  Several other bills, that had the potential to greatly impact the members of the Floor Covering Association were strongly opposed and never made it out of committee this session.  Among these bills was the Maryland Earned Sick and Safe Leave Act (HB 968/SB 753).  Under this bill, employers with more than 9 employees would have been required to provide their full-time and part-time employees with up to 56 hours of paid sick and “safe” leave based on the number of hours worked.  This bill was previously introduced in 2013, without the exception for businesses with fewer than 10 employees and was unsuccessful.  Even with the exception for small businesses this year, this bill received strong opposition from the business community, including our Association.  As with the previously mentioned bills, support in the House Economics Matter Committee and the Senate Finance Committee was divided again on party lines.  Along with the increase in the minimum wage, a mandate to provide employees with paid time off would have extremely costly for many small businesses in Maryland. One of the most significant bills for our commercial members which, fortunately also did not make it out of committee, was the Prevailing Wage Rates Reform Act of 2014.  Under this bill, the prevailing wage laws would have been expanded to include private development on land owned or leased by the State or a political subdivision, it would have eliminated the 50% State funding threshold required for a project to be subject to the prevailing wage laws, and it would have eliminated the annual prevailing wage survey thus establishing the labor union’s collectively bargained wage rates as the prevailing wage rate for all construction trades throughout the state.  As if the prevailing wage rates are not already nearly synonymous with the union rate, this would have been disastrous for the construction industry as a whole, which is more than 87% NON-union in Maryland, but specifically for the flooring industry, which is nearly 100% NON-union in Maryland.  While the current prevailing wage rates are unrealistic and the manner by which they are determined is indeed faulty because of the lack of real data being collected by the State, eliminating all wage rate data collection is not the solution to the problem.  There was strong opposition to this bill not only from the Floor Covering Association, but also from other organizations representing merit shop employers.  Support in the legislature was also sharply divided along party lines with strong opposition from our supporters on the Republican side of the aisle in both the House Economic Matters Committee and the Senate Finance Committee. The Maryland Northern Virginia Floor Covering Association will continue to support legislation that favors businesses in Maryland and will continue to strongly oppose any legislation that would endanger the ability of the members of the Association to continue operating in Maryland.  Given the current political climate not only in Maryland, but throughout the U.S. and the legislative trends of the past few years, there is no doubt that more anti-business legislation will be proposed and unfortunately, some will pass in the coming year and beyond.  However, we do not intend to sit passively by and let anyone undermine our members’ businesses without a fight.  The Association will also continue to work closely with our lobbyist, Mr. Bruce Bereano, as well as with a number of key legislators to establish strong working relationships with legislators throughout the State.  These relationships with legislators who understand business and support legislation that favors the continued success of businesses in Maryland, are critical to our success as an organization and to the success of each and every one of our members.