EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0555*
SENATE BILL 555
K3 3lr0134
CF HB 549
By: The President (By Request – Administration) and Senators Waldstreicher,
Augustine, Benson, Carter, Ellis, Hettleman, Jackson, Kagan, King, Kramer,
Lam, McCray, Muse, Rosapepe, Smith, Sydnor, M. Washington, and Watson
Introduced and read first time: February 6, 2023
Assigned to: Finance and Budget and Taxation
A BILL ENTITLED
AN ACT concerning 1
Fair Wage Act of 2023 2
FOR the purpose of increasing the State minimum wage rate in effect for certain periods of 3
time; increasing, except under certain circumstances, the State minimum wage rate 4
in effect for certain periods of time based on annual growth in a certain consumer 5
price index; altering the authority of the Board of Public Works to temporarily 6
suspend an increase in the minimum wage rate; repealing the requirement that the 7
Governor’s budgets for certain fiscal years include certain provider rate increases; 8
and generally relating to the State minimum wage rate. 9
BY repealing and reenacting, with amendments, 10
Article – Health – General 11
Section 7–307, 16–201.3, and 16–201.4 12
Annotated Code of Maryland 13
(2019 Replacement Volume and 2022 Supplement) 14
BY repealing and reenacting, with amendments, 15
Article – Labor and Employment 16
Section 3–413 and 3–413.1 17
Annotated Code of Maryland 18
(2016 Replacement Volume and 2022 Supplement) 19
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 20
That the Laws of Maryland read as follows: 21
Article – Health – General 22
7–307. 23
2 SENATE BILL 555
(a) (1) In this section the following words have the meanings indicated. 1
(2) “Community direct service worker” means an employee of a community 2
provider that provides treatment or services to developmentally disabled individuals. 3
(3) “Community provider” means a community–based agency or program 4
funded by the Administration to serve individuals with developmental disabilities. 5
(4) “Rate” means the reimbursement rate paid by the Department to a 6
community provider from the State General Fund, Maryland Medical Assistance Program 7
funds, other State or federal funds, or a combination of funds. 8
(b) Notwithstanding the provisions of this title or any other provision of law, the 9
Department shall reimburse community providers as provided in this section. 10
(c) Subject to subsection (d) of this section, the Department shall increase the rate 11
of reimbursement for community service providers each fiscal year by the amount of rate 12
increase included in the State budget for that fiscal year. 13
(d) (1) The Governor’s proposed budget for fiscal year 2019 shall include a 14
3.5% rate increase for community service providers over the funding provided in the 15
legislative appropriation for Object 08 Contractual Services in Program M00M01.02 16
Community Services for fiscal year 2018. 17
(2) The Governor’s proposed budget for fiscal year 2021 shall include a 4% 18
rate increase for community service providers over the funding provided in the legislative 19
appropriation for Object 08 Contractual Services in Program M00M01.02 Community 20
Services for fiscal year 2020. 21
(3) The Governor’s proposed budget for fiscal year 2022 shall include a 4% 22
rate increase for community service providers over the funding provided in the legislative 23
appropriation for Object 08 Contractual Services in Program M00M01.02 Community 24
Services for fiscal year 2021. 25
(4) The Governor’s proposed budget for fiscal year 2023 shall include a 4% 26
rate increase for community service providers over the funding provided in the legislative 27
appropriation for Object 08 Contractual Services in Program M00M01.02 Community 28
Services for fiscal year 2022. 29
(5) The Governor’s proposed budget for fiscal year 2024 shall include a 4% 30
rate increase for community service providers over the funding provided in the legislative 31
appropriation for Object 08 Contractual Services in Program M00M01.02 Community 32
Services for fiscal year 2023. 33
[(6) The Governor’s proposed budget for fiscal year 2025 shall include a 4% 34
rate increase for community service providers over the funding provided in the legislative 35
appropriation for Object 08 Contractual Services in Program M00M01.02 Community 36 SENATE BILL 555 3
Services for fiscal year 2024. 1
(7) The Governor’s proposed budget for fiscal year 2026 shall include a 4% 2
rate increase for community service providers over the funding provided in the legislative 3
appropriation for Object 08 Contractual Services in Program M00M01.02 Community 4
Services for fiscal year 2025.] 5
(e) The Governor’s proposed budget for fiscal year 2016 and thereafter for 6
community service providers shall be presented in the same manner, including object and 7
program information, as provided for in the fiscal year 2015 budget. 8
(f) A portion of the funds in subsection (e) of this section may be allocated to 9
address the impact of an increase in the State minimum wage on wages and benefits of 10
direct support workers employed by community providers licensed by the Developmental 11
Disabilities Administration. 12
16–201.3. 13
(a) (1) In this section the following words have the meanings indicated. 14
(2) “Community provider” means a community–based agency or program 15
funded by the Behavioral Health Administration or the Medical Care Programs 16
Administration to serve individuals with mental disorders, substance–related disorders, or 17
a combination of these disorders. 18
(3) “Rate” means the reimbursement rate paid by the Department to a 19
community provider from the State General Fund, Maryland Medical Assistance Program 20
funds, other State or federal funds, or a combination of these funds. 21
(b) This section does not apply to reimbursement for any service provided by a 22
community provider whose rates are regulated by the Health Services Cost Review 23
Commission. 24
(c) It is the intent of the General Assembly that a substantial portion of the rate 25
adjustment provided under subsection (d) of this section be used to: 26
(1) Compensate direct care staff and licensed clinicians employed by 27
community providers; and 28
(2) Improve the quality of programming provided by community providers. 29
(d) (1) The Governor’s proposed budget for fiscal year 2019 and fiscal year 30
2020 shall include a 3.5% rate increase for community providers over the funding provided 31
in the legislative appropriation for the immediately preceding fiscal year for each of the 32
following: 33
(i) Object 08 Contractual Services in Program M00Q01.10 Medicaid 34 4 SENATE BILL 555
Behavioral Health Provider Reimbursement – Medical Care Programs Administration; 1
(ii) Object 08 Contractual Services in Program M00L0 1.02 2
Community Services – Behavioral Health Administration; and 3
(iii) Object 08 Contractual Services in Program M00L01.03 4
Community Services for Medicaid State Fund Recipients – Behavioral Health 5
Administration. 6
(2) The Governor’s proposed budget for fiscal year 2021 shall include a 4% 7
rate increase for community providers over the funding provided in the legislative 8
appropriation for the immediately preceding fiscal year for each of the following: 9
(i) Object 08 Contractual Services in Program M00Q01.10 Medicaid 10
Behavioral Health Provider Reimbursement – Medical Care Programs Administration; 11
(ii) Object 08 Contractual Services in Program M00L01.02 12
Community Services – Behavioral Health Administration; and 13
(iii) Object 08 Contractual Services in Program M00L01.03 14
Community Services for Medicaid State Fund Recipients – Behavioral Health 15
Administration. 16
(3) The Governor’s proposed budget for fiscal year 2022 shall include a 17
3.5% rate increase for community providers over the funding provided in the legislative 18
appropriation for the immediately preceding fiscal year for each of the following: 19
(i) Object 08 Contractual Services in Program M00Q01.10 Medicaid 20
Behavioral Health Provider Reimbursement – Medical Care Programs Administration; 21
(ii) Object 08 Contractual Services in Program M00L01.02 22
Community Services – Behavioral Health Administration; and 23
(iii) Object 08 Contractual Services in Program M00L01.03 24
Community Services for Medicaid State Fund Recipients – Behavioral Health 25
Administration. 26
(4) The Governor’s proposed budget for fiscal year 2023 shall include a 27
3.25% rate increase for community providers over the funding provided in the legislative 28
appropriation for the immediately preceding fiscal year for each of the following: 29
(i) Object 08 Contractual Services in Program M00Q01.10 Medicaid 30
Behavioral Health Provider Reimbursement – Medical Care Programs Administration; 31
(ii) Object 08 Contractual Services in Program M00L01.02 32
Community Services – Behavioral Health Administration; and 33
SENATE BILL 555 5
(iii) Object 08 Contractual Services in Program M00L01.03 1
Community Services for Medicaid State Fund Recipients – Behavioral Health 2
Administration. 3
(5) The Governor’s proposed budget for fiscal year 2024 shall include a 3% 4
rate increase for community providers over the funding provided in the legislative 5
appropriation for the immediately preceding fiscal year for each of the following: 6
(i) Object 08 Contractual Services in Program M00Q01.10 Medicaid 7
Behavioral Health Provider Reimbursement – Medical Care Programs Administration; 8
(ii) Object 08 Contractual Services in Program M00L01.02 9
Community Services – Behavioral Health Administration; and 10
(iii) Object 08 Contractual Services in Program M00L01.03 11
Community Services for Medicaid State Fund Recipients – Behavioral Health 12
Administration. 13
(6) [The Governor’s proposed budget for fiscal year 2025 shall include a 4% 14
rate increase for community providers over the funding provided in the legislative 15
appropriation for the immediately preceding fiscal year for each of the following: 16
(i) Object 08 Contractual Services in Program M00Q01.10 Medicaid 17
Behavioral Health Provider Reimbursement – Medical Care Programs Administration; 18
(ii) Object 08 Contractual Services in Program M00L01.02 19
Community Services – Behavioral Health Administration; and 20
(iii) Object 08 Contractual Services in Program M00L01.03 21
Community Services for Medicaid State Fund Recipients – Behavioral Health 22
Administration. 23
(7) The Governor’s proposed budget for fiscal year 2026 shall include a 4% 24
rate increase for community providers over the funding provided in the legislative 25
appropriation for the immediately preceding fiscal year for each of the following: 26
(i) Object 08 Contractual Services in Program M00Q01.10 Medicaid 27
Behavioral Health Provider Reimbursement – Medical Care Programs Administration; 28
(ii) Object 08 Contractual Services in Program M00L01.02 29
Community Services – Behavioral Health Administration; and 30
(iii) Object 08 Contractual Services in Program M00L01.03 31
Community Services for Medicaid State Fund Recipients – Behavioral Health 32
Administration. 33
(8)] The Governor’s proposed budget for fiscal year 2019 and each fiscal year 34 6 SENATE BILL 555
thereafter for community providers shall be presented in the same manner, including object 1
and program information, as in the fiscal year 2018 budget. 2
(e) (1) The Behavioral Health Administration and the Medical Care Programs 3
Administration jointly shall: 4
(i) Conduct an independent cost–driven, rate–setting study to set 5
community provider rates for community–based behavioral health services that includes a 6
rate analysis and an impact study that considers the actual cost of providing 7
community–based behavioral health services; 8
(ii) Develop and implement a payment system incorporating the 9
findings of the rate–setting study conducted under item (i) of this paragraph, including 10
projected costs of implementation and recommendations to address any potential shortfall 11
in funding; and 12
(iii) Consult with stakeholders, including community providers and 13
individuals receiving services, in conducting the rate–setting study and developing the 14
payment system required by this paragraph. 15
(2) The Administration, on or before September 30, 2019, shall complete 16
the study required under paragraph (1)(i) of this subsection. 17
(3) The Administration shall adopt regulations to implement the payment 18
system required by paragraph (1) of this subsection. 19
(f) If services of community providers are provided through managed care 20
organizations, the managed care organizations shall: 21
(1) Pay the rate in effect during the immediately preceding fiscal year for 22
the first fiscal year the managed care organizations provide the services; and 23
(2) Adjust the rate for community providers each fiscal year by at least the 24
same amount that otherwise would have been required under subsection (d) of this section. 25
(g) Increased funding provided under subsection (d) of this section may be used 26
only to increase the rates paid to: 27
(1) Community providers accredited by a State–approved accrediting body 28
and licensed by the State; and 29
(2) Health care providers who are acting within the scopes of practice of 30
the health care providers’ licenses or certificates as specified under the Health Occupations 31
Article. 32
(h) (1) On or before December 1, 2018, the Department shall submit an interim 33
report to the Governor and, in accordance with § 2–1257 of the State Government Article, 34 SENATE BILL 555 7
the General Assembly on the delivery system through which community–based behavioral 1
health services should be provided and any preliminary recommendations regarding the 2
payment system required under this section. 3
(2) On or before December 1, 2019, and on or before December 1 each year 4
thereafter, the Department shall submit a report to the Governor and, in accordance with 5
§ 2–1257 of the State Government Article, the General Assembly on the impact of the rate 6
adjustments and the payment system required under this section on community providers, 7
including the impact on: 8
(i) The wages and salaries paid and the benefits provided to direct 9
care staff and licensed clinicians employed by community providers; 10
(ii) The tenure and turnover of direct care staff and licensed 11
clinicians employed by community providers; and 12
(iii) The ability of community providers to recruit qualified direct 13
care staff and licensed clinicians. 14
(3) The Department may require a community provider to submit, in the 15
form and manner required by the Department, information that the Department considers 16
necessary for completion of the report required under paragraph (2) of this subsection. 17
16–201.4. 18
(a) (1) In this section the following words have the meanings indicated. 19
(2) “Provider” means a provider of: 20
(i) Nursing home services; 21
(ii) Medical day care services; 22
(iii) Private duty nursing services; 23
(iv) Personal care services; 24
(v) Home– and community–based services; and 25
(vi) Services provided through the Community First Choice program. 26
(3) “Rate” means the reimbursement rate paid by the Department to 27
providers of nursing home, medical day care, private duty nursing, personal care, and 28
home– and community–based services and services provided through the Community First 29
Choice program from the State General Fund, Maryland Medical Assistance Program 30
funds, other State or federal funds, or a combination of these funds. 31
8 SENATE BILL 555
(b) (1) The Governor’s proposed budget for fiscal year 2021 shall include a 4% 1
rate increase for providers over the funding provided in the legislative appropriation for 2
the immediately preceding fiscal year in Program M00Q01.03 Medical Care Provider 3
Reimbursements – Medical Care Programs Administration and Program M00Q01.07 4
Maryland Children’s Health Program – Medical Care Programs Administration. 5
(2) The Governor’s proposed budget for fiscal year 2022 shall include a 4% 6
rate increase for providers over the funding provided in the legislative appropriation for 7
the immediately preceding fiscal year in Program M00Q01.03 Medical Care Provider 8
Reimbursements – Medical Care Programs Administration and Program M00Q01.07 9
Maryland Children’s Health Program – Medical Care Programs Administration. 10
(3) The Governor’s proposed budget for fiscal year 2023 shall include a 4% 11
rate increase for providers over the funding provided in the legislative appropriation for 12
the immediately preceding fiscal year in Program M00Q01.03 Medical Care Provider 13
Reimbursements – Medical Care Programs Administration and Program M00Q01.07 14
Maryland Children’s Health Program – Medical Care Programs Administration. 15
(4) The Governor’s proposed budget for fiscal year 2024 shall include a 4% 16
rate increase for providers over the funding provided in the legislative appropriation for 17
the immediately preceding fiscal year in Program M00Q01.03 Medical Care Provider 18
Reimbursements – Medical Care Programs Administration and Program M00Q01.07 19
Maryland Children’s Health Program – Medical Care Programs Administration. 20
(5) [The Governor’s proposed budget for fiscal year 2025 shall include a 4% 21
rate increase for providers over the funding provided in the legislative appropriation for 22
the immediately preceding fiscal year in Program M00Q01.03 Medical Care Provider 23
Reimbursements – Medical Care Programs Administration and Program M00Q01.07 24
Maryland Children’s Health Program – Medical Care Programs Administration. 25
(6) The Governor’s proposed budget for fiscal year 2026 shall include a 4% 26
rate increase for providers over the funding provided in the legislative appropriation for 27
the immediately preceding fiscal year in Program M00Q01.03 Medical Care Provider 28
Reimbursements – Medical Care Programs Administration and Program M00Q01.07 29
Maryland Children’s Health Program – Medical Care Programs Administration. 30
(7)] The Governor’s proposed budget for fiscal year 2021 and each fiscal year 31
thereafter shall be presented in the same manner, including object and program 32
information, as in the fiscal year 2020 budget. 33
Article – Labor and Employment 34
3–413. 35
(a) (1) In this section the following words have the meanings indicated. 36
SENATE BILL 555 9
(2) “CONSUMER PRICE INDEX” MEANS THE CONSUMER PRICE INDEX 1
FOR ALL URBAN CONSUMERS FOR THE WASHINGTON–ARLINGTON–ALEXANDRIA, 2
DC–VA–MD–WV METROPOLITAN AREA OR A SUCCESSOR METROPOL ITAN AREA 3
INDEX PUBLISHED BY T HE FEDERAL BUREAU OF LABOR STATISTICS. 4
(3) “Employer” includes a governmental unit. 5
[(3)] (4) “Small employer” means an employer that employs 14 or fewer 6
employees. 7
(b) Except as provided in subsection (d) of this section and §§ 3–413.1 and 3–414 8
of this subtitle, each employer shall pay: 9
(1) to each employee who is subject to both the federal Act and this subtitle, 10
at least the greater of: 11
(i) the minimum wage for that employee under the federal Act; or 12
(ii) the State minimum wage set under subsection (c) of this section; 13
and 14
(2) to each other employee who is subject to this subtitle, at least the 15
greater of: 16
(i) the highest minimum wage under the federal Act; or 17
(ii) the State minimum wage set under subsection (c) of this section. 18
(c) (1) Subject to § 3–413.1 of this subtitle and except as provided in paragraph 19
(2) of this subsection, the State minimum wage rate is: 20
(i) [for the 12–month period beginning July 1, 2017, $9.25 per hour; 21
(ii) for the 18–month period beginning July 1, 2018, $10.10 per hour; 22
(iii) for the 12–month period beginning January 1, 2020, $11.00 per 23
hour; 24
(iv) for the 12–month period beginning January 1, 2021, $11.75 per 25
hour; 26
(v) for the 12–month period beginning January 1, 2022, $12.50 per 27
hour; 28
(vi)] for the [12 month] 9–MONTH period beginning January 1, 2023, 29
$13.25 per hour; 30 10 SENATE BILL 555
[(vii) for the 12–month period beginning January 1, 2024, $14.00 per 1
hour; and 2
(viii)] (II) FOR THE 21–MONTH PERIOD beginning [January 1, 3
2025] OCTOBER 1, 2023, $15.00 per hour; AND 4
(III) FOR THE 12–MONTH PERIOD BEGINNING JULY 1, 2025, AND 5
EACH SUBSEQUENT 12–MONTH PERIOD , THE RATE DETERMINED BY THE 6
COMMISSIONER UNDER PA RAGRAPH (2)(II) OF THIS SUBSECTION . 7
(2) (I) EXCEPT AS PROVIDED IN SUBPARAGRAPH (III) OF THIS 8
PARAGRAPH , FOR THE 12–MONTH PERIOD BEGINNI NG JULY 1, 2025, AND EACH 9
SUBSEQUENT 12–MONTH PERIOD , THE STATE MINIMUM WAGE RA TE SHALL BE 10
INCREASED BY THE AMO UNT, ROUNDED TO THE NEARE ST 5 CENTS, THAT EQUALS 11
THE PRODUCT OF: 12
1. THE STATE MINIMUM WAGE RA TE IN EFFECT FOR THE 13
IMMEDIATELY PRECEDIN G 12–MONTH PERIOD ; AND 14
2. THE LESSER OF: 15
A. THE AVERAGE PERCENT AGE GROWTH IN THE 16
CONSUMER PRICE INDEX FOR THE IMMEDIA TELY PRECEDING 12–MONTH PERIOD , 17
AS DETERMINED BY THE COMMISSIONER UNDER SU BPARAGRAPH (II)1 OF THIS 18
PARAGRAPH ; OR 19
B. 5%. 20
(II) BEGINNING MARCH 1, 2025, AND EACH MARCH 1 21
THEREAFTER , THE COMMISSIONER SHALL DETERMINE AND ANNOUNCE: 22
1. THE AVERAGE PERCENT AGE GROWTH, IF ANY, IN THE 23
CONSUMER PRICE INDEX BASED ON THE IM MEDIATELY PRECEDING 12–MONTH 24
PERIOD FOR WHICH DAT A ARE AVAILABLE ON MARCH 1; AND 25
2. THE STATE MINIMUM WAGE RA TE EFFECTIVE FOR 26
THE 12–MONTH PERIOD BEGINNI NG THE FOLLOWING JULY 1. 27
(III) IF THE COMMISSIONER DETERMIN ES THAT THERE IS A 28
DECLINE OR NO GROWTH IN THE CONSUMER PRICE INDEX, THE STATE MINIMUM 29
WAGE RATE SHALL REMA IN THE SAME AS THE R ATE THAT WAS IN EFFE CT FOR THE 30
IMMEDIATELY P RECEDING 12–MONTH PERIOD . 31
SENATE BILL 555 11
[(2)] (3) Subject to § 3–413.1 of this subtitle, the State minimum wage 1
rate for a small employer is: 2
(i) [for the 18–month period beginning July 1, 2018, $10.10 per 3
hour; 4
(ii) for the 12–month period beginning January 1, 2020, $11.00 per 5
hour; 6
(iii) for the 12–month period beginning January 1, 2021, $11.60 per 7
hour; 8
(iv) for the 12–month period beginning January 1, 2022, $12.20 per 9
hour; 10
(v)] for the [12–month] 9–MONTH period beginning January 1, 2023, 11
$12.80 per hour; AND 12
[(vi) for the 12–month period beginning January 1, 2024, $13.40 per 13
hour; 14
(vii) for the 12–month period beginning January 1, 2025, $14.00 per 15
hour; 16
(viii) for the 6–month period beginning January 1, 2026, $14.60 per 17
hour; and 18
(ix)] (II) FOR THE 21–MONTH PERIOD beginning [July 1, 2026] 19
OCTOBER 1, 2023, $15.00 per hour; AND 20
(III) FOR THE 12–MONTH PERIOD BEGINNING JULY 1, 2025, AND 21
EACH SUBSEQUENT 12–MONTH PERIOD , EQUIVALENT TO THE STATE MINIMUM 22
WAGE RATE UNDER PARAGRAPH (1)(III) OF THIS SUBSECTION . 23
(d) An employer may pay an employee a wage that equals a rate of 85% of the 24
State minimum wage established under this section if the employee is under the age of 18 25
years. 26
3–413.1. 27
(a) In this section, “Board” means the Board of Public Works. 28
(b) [(1)] Subject to subsection (d) of this section [and except as provided in 29
paragraph (2) of this subsection], on or before [October 1, 2020] MARCH 1, 2025, and 30
[October] MARCH 1 each year thereafter [until October 1, 2024], the Board shall 31
determine whether the seasonally adjusted total employment from the Current 32 12 SENATE BILL 555
Employment Statistics series as reported by the U.S. Bureau of Labor Statistics for the 1
most recent 6–month period is negative as compared with the immediately preceding 2
6–month period. 3
[(2) The Board is not required to make a determination under paragraph 4
(1) of this subsection if the Board has previously temporarily suspended an increase to the 5
minimum wage rate specified under § 3–413(c) of this subtitle.] 6
(c) (1) Subject to subsection (d) of this section, the Board may temporarily 7
suspend an increase to the minimum wage rate specified under § 3–413(c) of this subtitle 8
if the Board determined under subsection [(b)(1)] (B) of this section that the seasonally 9
adjusted total employment is negative. 10
(2) If the seasonally adjusted total employment is negative, the Board may 11
consider the performance of State revenues in the previous 6 months, as reported by the 12
Office of the Comptroller, in determining whether to temporarily suspend an increase to 13
the minimum wage rate specified under § 3–413(c) of this subtitle. 14
(d) [The Board may temporarily suspend an increase to the minimum wage rate 15
under subsection (c)(1) of this section only one time. 16
(e)] If the Board temporarily suspends an increase to the minimum wage rate 17
specified under § 3–413(c) of this subtitle: 18
(1) the minimum wage rate in effect for the period beginning the following 19
[January] JULY 1 shall remain the same as the rate that was in effect for the immediately 20
preceding 12–month period; 21
(2) the remaining minimum wage rates specified in § 3–413 of this subtitle 22
shall take effect 1 year later than the date specified; AND 23
(3) the Board shall notify the Commissioner that the minimum wage rate 24
increase for the period beginning the following [January] JULY 1 is suspended for 1 year[; 25
and 26
(4) a rate increase under §§ 7–307, 16–201.3, and 16–201.4 of the Health – 27
General Article for the immediately following fiscal year may not go into effect]. 28
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 29
1, 2023. 30