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$25 Minimum Wage, No Tip Credit and a Constitutional Mandate: What HB 1229/SB 886 Would Mean for Maryland
Feb 23, 2026
A $25 minimum wage does not affect only entry-level positions — it triggers wage compression, increases in payroll costs, pressure to raise prices and reduced hiring
- HB 1229/SB 886: $25 Minimum Wage + Elimination of Tip Credit
- Deadline to weigh in: Tuesday, Feb. 24 — Testimony Sign-Up & Submissions from 8:00 a.m.-6:00 p.m.
Legislation moving quickly in Annapolis would require a $25 per hour minimum wage by 2030, eliminate the tip credit, automatically increase wages with inflation, and embed this entire framework into the Maryland Constitution.
This is not a routine wage adjustment. It represents a rapid, structural, and permanent shift in Maryland’s wage policy with significant long-term consequences for employers, workers and communities.
What HB 1229/SB 886 Would Do
Under this legislation, employers would face:
- Raise the minimum wage to $25 per hour by 2030
- Eliminate the tip credit beginning in 2031
- Automatically increase wages with inflation starting in 2033
- Embed these mandates into the Maryland Constitution
If enacted, the effects would be immediate — and difficult to reverse
Take Action
HB 1229 Sign-Up Window: Tuesday, Feb. 24, 8:00 a.m. – 6:00 p.m. (10 hours only). Once the window closes, no additional sign-ups will be accepted.
House Hearing: February 26 at 1:00 p.m.
- Sign up to testify (in person or Zoom)
- Submit written testimony
- Email your legislators
Live testimony is strongly preferred and highly persuasive.
SB 886 Senate Hearing: March 11 at 1:00 p.m. We will share the Senate testimony deadline as it approaches.
The Wage Schedule: A 67% Increase in Just a Few Years
Maryland’s current minimum wage is $15 per hour. Under HB 1229/SB 886:
- $17 — January 1, 2027
- $20 — January 1, 2028
- $22.50 — January 1, 2029
- $25 — January 1, 2030
This pace of increase compresses years of wage growth into a short period of time and represents a 67% increase overall.
For restaurants, hospitality, retail, childcare, agriculture and other service industries operating on thin margins, that acceleration alone presents serious risk.
Eliminating the Tip Credit
Beginning Jan. 1, 2031, employers could no longer apply a tip credit.
Restaurants and food service employers would be required to pay the full minimum wage regardless of tips earned. This fundamentally alters compensation structures in hospitality — even in establishments where tipped employees already earn well above minimum wage — shifting the full wage burden to employers and compressing pay differentials across roles.
The Ripple Effects Go Far Beyond Entry-Level Wages
A $25 minimum wage does not affect only entry-level positions. It triggers:
- Wage compression across supervisors and experienced staff
- Significant increases in total payroll costs
- Pressure to raise prices for food, goods and services
- Reduced hiring, fewer hours, delayed expansion, or workforce reductions
For some small and mid-sized businesses, the question may not be whether to raise prices — but whether to reduce staff, automate, delay growth, or close altogether.
When businesses scale back or shut their doors, jobs disappear — and communities feel the impact.
Inflation Indexing + Constitutional Amendment
Beginning in 2033, minimum wage increases would occur automatically based on inflation.
- No legislative vote.
- No flexibility during economic downturns.
- No pause tied to industry conditions.
Even more significant, these wage mandates would be placed into the Maryland Constitution. If approved by voters, any future change would require another statewide referendum — regardless of economic conditions.
Make Your Voice Heard
If employers do not engage now, this proposal could move forward — and once embedded in the Constitution, it would be extraordinarily difficult to change.
- Take action on Tuesday, Feb. 24, 8:00 a.m.-6:00 p.m.
- Contact your legislators
- Sign up to testify and/or submit written testimony
- Sample letters available in our Action Toolkit
- Testimony submittal guidance available at mdchamber.org
Thank you for making your voice heard.
