Leggett Proposes Slower Implementation of 15-Dollar Minimum Wage

County executive also asks for other changes to bill that has split council

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Montgomery County Executive Ike Leggett

Andrew Metcalf, file photo

Montgomery County Executive Ike Leggett on Wednesday asked the County Council to amend a proposed bill to raise the county’s minimum wage to $15 per hour to impose a later effective date and change the definition of smaller employers.

Leggett proposed the changes in a memo he sent to council members. The memo asked that small employers be defined as 50 or fewer employers and that small employers have until July 1, 2024, to pay their employees a $15-per-hour minimum wage. Large employers would have to begin paying the $15 per hour wage on July 1, 2022, under Leggett’s plan.

The council is now considering a second $15 per hour minimum wage bill, which was introduced by Marc Elrich, after Leggett vetoed the first bill in January. The new bill calls for employers with more than 25 employers to begin paying the $15-per-hour wage in 2020 and employers with 25 employees or less to start paying the minimum wage by 2022.

The first bill, which would have instituted the $15-per-hour wage for many businesses by 2020, passed the council 5-4, one affirmative vote shy of the two-thirds majority needed to override Leggett’s veto.

Leggett said at the time he wanted the county to study the impact that raising the minimum wage would have on the local economy.

The county paid Public Financial Management Inc. $149,000 to do the study, but the company’s methodology of relying on businesses to self-report the potential economic impact was roundly criticized. In addition, PFM has since acknowledged that it made a mistake in its calculations, inflating its results.

Leggett acknowledged the flaws in PFM’s work in his memo.

“As you know, after receiving the initial report from our consultant, (PFM), the firm discovered an error in its calculation of the economic impact and the number of job losses that led them to revise the conclusions of the initial report,” Leggett wrote. “While PFM has addressed some of these concerns found in the initial report, my staff has a number of outstanding questions and concerns and continues working with PFM to resolve those concerns.”

Leggett proposed the longer timeline to institute the minimum wage because he’s concerned the county may be at an economic disadvantage compared to neighboring jurisdictions—such as Northern Virginia—that haven’t raised the minimum wage. Virginia's wage remains the same as the federal minimum wage of $7.25 per hour. Montgomery County’s current minimum wage is $11.50 per hour.

“It is my belief then, and it is my belief now, that the bill was too much too fast,” Leggett wrote.

He also added that he believes Montgomery County is not a destination place like other jurisdictions that have raised the minimum wage to $15, such as Seattle and Washington, D.C., so county residents would bear the burden of rising costs.

Leggett also proposed adding a 90-day employee testing period to the bill that would allow employers to pay a new employee 85 percent of the minimum wage during that time.

It’s not clear if the council will accept the longer timeline and other changes proposed by Leggett. Elrich and Council members Nancy Navarro, Tom Hucker, Hans Riemer and George Leventhal voted for the first bill. Roger Berliner, Nancy Floreen, Sidney Katz and Craig Rice voted against it.

Since then, Elrich and the bill’s other supporters have been trying to woo a sixth council member to their side to give them a veto-proof majority.

Elrich said Thursday that Leggett appears to be modeling the legislation after a Minneapolis measure. The City Council there voted in June to raise its minimum wage for all employers to $15 per hour by July 2024. Seattle already has a $15 minimum wage, while D.C. is set to increase its minimum wage to $15 by 2020.

When asked whether he’d support Leggett’s plan, Elrich responded, “I think that’s an unreasonable length of time and there’s absolutely no data to support that there’s a need to wait.”

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