As of January 1, 2024, the General Assembly’s Fair Wage Act of 2023 increased Maryland’s minimum wage from $13.25 to $15.00 an hour, while the federally-mandated minimum wage remained at $7.25 an hour.
Montgomery County: 51 or more employees $16.70. Up to 50 employees $15.00 an hour.
Howard County: 15 or more employees – $15.00 ($16 on 1/1/25). Less than 15 – $15.50 on 1/1/26, $16 7/1/26)
The current minimum wage for tipped employees is $3.63.
Employers in Maryland must ensure their tipped employees are making the regular minimum wage rate of $10.10 with the combined tipped minimum wage and their tips. If they are not, the employer must make up the difference.
If employees spend more than 20% of their time performing non-tipped duties, the employer must pay them the standard minimum wage for that time.
Mandatory service charges do not count as tips, even if the employee collects them.
Employers may also pay employees a set amount that represents the tips of the employee during a workweek.
If an employee is paid using a set tip amount system, they may assert with the Maryland Department of Labor that they really received a lower tip amount than the set amount paid.
Non-exempt employees must be paid an overtime rate of 1 ½ times the regular rate of pay for hours worked in excess of 40 in one workweek.
The federal overtime rule stipulates that the minimum salary requirement for administrative, professional, and executive exemptions is $684 per week, or $35,568 per year.
Employers must provide a 30-minute break to employees under 18 years of age for every 5 consecutive hours of work.
The only break regulations Maryland requires are for the retail industry.
The Healthy Retail Employee Act requires retail establishments with 50 or more retail employees to provide the following breaks:
Maryland law requires that employers must pay all employees who separate from employment (including those who resigned or were terminated, laid off or suspended) their final paycheck by the next scheduled payday.
State law requires that all minors under the age of 18 must obtain a work permit before starting a new job. Employers must provide a 30-minute break to minor employees for every 5 consecutive hours of work.
Minors 14 and 15 years of age may only work between 7 a.m. and 7 p.m. during the school year and between 7 a.m. and 9 p.m. during the summer.
When school is in session, they may only work 18 hours a week, 3 hours a day on school days and 8 hours a day on the weekends and holidays. They also may not work more than 6 days a week.
When school is not in session, they may work a maximum of 40 hours a week, 8 hours a day, and 6 days a week.
Minors 16 and 17 years of age may only work between 6 a.m. and 10 p.m. on school nights. However, if the establishment stops serving customers at 10 p.m., they may work until 10:15.
They may work between 6 a.m. and 11:30 p.m. on non-school nights.
Restaurants and racetracks may employ 16 and 17 year olds until midnight on non-school nights.
Regardless of whether or not school is in session, they may work a maximum of 48 hours a week, 9 hours a day, and 6 days a week.
Maryland employment standards stipulate that employees are entitled to least one hour of sick and safe leave for every 30 hours they work, up to forty hours of sick and safe leave each year.
Employers with 15 or more employees must provide paid sick leave.
Employees with 14 or fewer employees must provide unpaid sick leave.
Employers in Montgomery County who have four or more employees must allow employees to earn one hour of Earned Sick/Safe Leave for every 30 hours worked, up to a total of 56 hours per year.
Employers who provide any kind of paid leave must allow employees to use that leave for the care of a sick family member.
Employers may be required to provide employees unpaid leave in accordance with the federal Family and Medical Leave Act.
Employers are not required to provide vacation leave but must comply with their own established policies in an employee handbook if they choose to implement one.
Employees must be paid for any accrued vacation time upon separation of employment, if the employer’s established policy is silent on the matter.
Employers may establish a policy disqualifying employees from receiving payment for accrued vacation upon separation from employment if they fail to comply with certain requirements.
The amount of vacation time an employee can accrue may be capped by the employer as long as the employee has been notified in writing.
Employers can implement a “use-it-or-lose-it” policy that requires employees to use their vacation time by a set date, as long as employees have been informed in writing.
Employers with 15–49 employees are required to allow their employees to take up to six weeks of unpaid leave for the birth of a child or the placement of a child with the employee for adoption or foster care.
Employers do not have to pay employees for time spent responding to a jury summons, but employees cannot be terminated or otherwise penalized for doing so.
Private employers are not required to provide paid or unpaid holiday leave, but must comply with any established policies if they choose to implement them.
Employees must be allowed to take 2 hours of paid leave to vote as long as the employee does not have enough off-duty time to make it to the polls.
Employees may be required to show employers proof that they voted.
Employers are not required to provide bereavement leave, but may be required to comply with any bereavement policy they may have.
The federal Uniformed Services Employment and Reemployment Rights Act (USERRA) is applicable to all employers in the United States.
Employers that have at least 50 employees must allow their employees to take leave on the day an immediate family member leaves for or returns from active duty as a member of the US Armed Forces.
Immediate family members include a spouse, parent, stepparent, child, stepchild, or sibling.
Employers that have at least 15 employees must provide their employees with leave to donate an organ, bone marrow, or stem cells.
An employee may take up to 60 business days of unpaid leave to donate an organ and 30 days to donate bone marrow in a 12-month period.
An employee’s benefits continue during their leave, including seniority, vacation, salary adjustments, and health insurance.
Employers cannot take any adverse action against an employee for appearing as a witness in a criminal or civil proceeding.
Employers cannot take any adverse action against an employee for attending a proceeding that they have a right to attend as the victim of a crime.
Federal law makes it illegal for an employer to discriminate on the basis of: Race, Color, Age, Sex, Sexual orientation, Gender, Gender identity, Religion, National origin, Pregnancy, Genetic information, including family medical history, Physical or mental disability, Child or spousal support withholding, Military or veteran status, Citizenship and/or immigration status.
Additionally, Maryland prohibits employers with 15 or more employees from discriminating based on marital status or credit information.
Maryland is an employment-at-will state, which means that without a written employee contract, employees can be terminated for any reason at any time, provided that the reason is not discriminatory and that the employer is not retaliating against the employee for a rightful action.
In case of layoffs and workforce reduction, Maryland requires that employers provide notice to their local Office of Unemployment Insurance when they lay off 25 or more employees for more than seven days.
Employers must provide 60 days’ advance notice to employees when they implement a “reduction in operations.” They must also provide continued benefits, under terms that are yet to be determined by the secretary of labor.
Regarding employment and payroll data, under the Fair Labor Standards Act (FLSA) and others, you must:
For at least 3 years: keep payroll records, certificates, agreements, notices, collective bargaining agreements, employment contracts, and sales and purchase records. Also keep completed copies of each employee’s I-9 for three years after they are hired. If the employee works longer than three years, hold on to the form for at least one year after the employee leaves.
For at least 2 years: Keep basic employment and earning records like timecards, wage-rate tables, shipping and billing records, and records of additions to or deductions from wages. Also keep the records that show why you may pay different wages to employees of different sexes, such as wage rates, job evaluations, seniority and merit systems, and collective bargaining agreements.
For at least 1 year: The Equal Employment Opportunity Commission says employers should keep all employment records for at least one year from the employee’s date of termination.
Other record-keeping laws that may apply to you:
Under the Occupational Safety and Health Act, you need to keep records of job-related injuries and illnesses for five years. But some records, like those covering toxic substance exposure, have to be kept for 30 years.
You must keep files of benefit plans and seniority and merit systems while they are in effect and for at least a year after they end. You must also retain summary descriptions and annual reports of benefits plans for six years.
If your company is covered by the Family and Medical Leave Act, you must also retain relevant records of leaves, notices, policies, and more for three years.
Employers cannot use facial recognition technology to create a facial template as part of the interview process unless the applicant agrees in writing. Facial recognition technology is defined as a tool that analyzes facial features to recognize or track them in images and videos.
Employers with 50 or more workers must submit a report of the following by July 1, 2022:
Employers must pay their employees at least biweekly or semimonthly on regular paydays the employer chooses in advance. They may pay exempt executive, administrative, or professional employees less frequently. New employees must be provided with notice of the following: Their rate of pay; Paydays; Leave benefits.
If a regular payday falls on a non-workday, wages must be paid the workday before. Each pay period, employers must provide employees with a statement of their earnings and deductions. Social Security Numbers may not appear on employees’ paychecks, pay statements, or direct deposit notifications.
Healthcare employers may not discharge or discriminate against an employee for doing any of the following: Reporting an alleged violation of the law. participating in an investigation or proceeding regarding a violation of the law, or opposing or refusing to participate in a violation of the law.
COBRA is a federal law that allows many employees to continue their health insurance benefits after their employment ends. Because federal COBRA only applies to employers that have 20 or more employees, many states have adopted their own versions of the law, which are known as “mini-COBRAs.” Maryland’s mini-COBRA allows employees to continue their coverage for up to 18 months. Each individual certification of coverage must contain a notice of the right to continue coverage and employers must notify an employee that continuation coverage is available.
Employers who run background checks should ensure they’re following the requirements of the Fair Credit Reporting Act, which are available here.
Maryland requires that employers conduct background checks on employees in the following entities: Public schools; Private or nonpublic schools; Childcare centers. Institutions, or homes; Day care homes; Juvenile detention, correction, or treatment facilities; Foster care family homes or group facilities; Children’s camps; Childcare resource and referral centers; Associations that have a pool of potential temporary or substitute employees for registered family day care providers or licensed day care centers; Healthcare institutions or organizations; Adult dependent care facilities; Private home detention monitoring agencies.
Employers may not obtain credit checks on applicants or employees unless either the employer or the applicant or employee falls under certain exceptions.
Employers may not ask applicants about expunged records. Additionally, the Maryland Office of Fair Practices has issued a “Guidelines for Pre-Employment Inquiries Technical Assistance Guide,” which indicates that employers should not ask applicants about arrest or general conviction records.
As of February 29, 2020, Maryland adds a “ban the box” law, which prohibits employers with 15 or more full-time employees from asking applicants about their criminal history prior to an in-person interview, unless required by state or federal law or the employer provides services or direct care to minors or vulnerable populations. Employers may ask about an applicant’s criminal history during the first in-person interview or any time thereafter.
If employers want to inquire about conviction records, they should only ask about those that are directly related to the job and then consider the nature of the crime, the recency, and any efforts made toward rehabilitation.
Maryland is an “all parties” consent state, meaning every person on a phone call must be aware that they are being monitored or recorded and have consented by placing or continuing the phone call.
This means employers may monitor or record phone calls between their own employees only if each employee has been given notice that phone calls may be monitored or recorded.
However, phone calls placed by employees to outside parties may not be monitored or recorded unless the outside party has also consented.
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Remember, this is not official legal advice.
View the resources available to Maryland business owners and workers impacted by the coronavirus outbreak in our state-by-state COVID-19 Resource Center.
This summary is not qualified legal advice. Laws are always subject to change, and they can vary from municipality to municipality. It’s up to you to make sure you’re compliant with all laws and statutes in your area. If you need more compliance help, we recommend consulting with a qualified lawyer, checking with your local government agencies, or signing up for Homebase to get help from our certified HR Pros.
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