Introduction to employment laws in Maryland
Overview
Maryland marries a business-friendly environment with a high-quality workforce. The state has a comprehensive set of rules governing various aspects of the employer-employee relationship, from minimum wage and overtime pay to leave policies and workplace safety.
Understanding it’s detailed employment regulations is critical for successful operations in Maryland. In this guide, we’ll help keep you compliant as you onboard and manage workers in the state.
Employing in Maryland: Key employment laws and practices
Standard work hours
Full-time work hours In Maryland are generally recognized to be 40 hours per week. However, these hours may vary based on the specific industry or job role.
There are no strict standard work hours defined by law for contractual professionals who may work on a project basis. Work hours largely depend on the terms of the contract between the employer and the contractor.
Self-employed workers have the flexibility to set their own work hours. As these individuals are not employees, the rules that apply to full-time or contractual workers do not apply to them.
Minimum wage and overtime
The current minimum wage in Maryland is $15.00 per hour, which applies to both part-time and full-time employees.
Barring certain exceptions, non-exempt employees working more than 40 hours a week are entitled to receive pay at one and a half times their regular hourly rate for all overtime hours worked.
Insurance and benefits
Maryland law requires employers to provide certain benefits to their employees. These include unemployment insurance, workers’ compensation insurance, and temporary disability insurance.
Employers in Maryland can offer health insurance coverage to their employees, but it is not a state-mandated requirement. However, under the Affordable Care Act (ACA), businesses with 50 or more full-time employees are required to offer health insurance.
Maryland law does not mandate retirement benefits like 401k plans, but employers can offer them as part of their compensation packages.
Employers can also offer other benefits such as dental and vision insurance, life insurance and more based on their discretion and company policies.
Benefit | Description |
Health insurance | Employers with 50 or more full-time employees must offer health coverage to employees and dependents |
Disability benefits for pregnancy/childbirth | Insurers offering group disability policies must offer the option to purchase coverage for disabilities caused by pregnancy or childbirth |
Hospice services | Inpatient and outpatient hospice services must be offered |
Alzheimer’s disease treatment | Coverage for Alzheimer’s nursing home and custodial care must be offered |
Retirement benefits | Employers with automatic payroll must participate in the MarylandSaves retirement program |
Meal and rest periods
Under Maryland employment laws, employers are not obligated by state law to provide meal-related or other breaks for non-minor employees. Exceptions exist related to the Healthy Retail Employee Act.
However, the Fair Labor Standards Act (FLSA) requires employers to pay for short breaks lasting between five to 20 minutes. If a break exceeds 20 minutes and is taken for a meal, the employer is not required to pay for this time, provided the employee is fully relieved from duty.
Multiplier makes it easy to manage benefits for Maryland employees.
Anti-discrimination Laws
In addition to federal laws prohibiting discrimination in the workplace, Maryland has several state-specific regulations that provide greater protections. The Maryland Fair Employment Practices Act (FEPA) prohibits employers with 15 or more employees from discriminating on various grounds. These include race (including hair texture and hairstyles), color, religion, sex, sexual orientation, gender identity, age, national origin/ancestry, marital status, disability unrelated to job performance, and genetic information. Under FEPA, harassment is also considered a form of discrimination.
Maryland’s Equal Pay for Equal Work law prohibits employers from paying a wage to employees of one sex or gender identity at a rate less than the rate paid to employees of another sex or gender identity if both employees work in the same establishment and perform comparable work.
The law forbids employers from providing less favorable employment opportunities based on an employee’s sex or gender identity. Exceptions are allowed if pay differentials are based on factors such as seniority systems, different abilities or duties, shift differences, or performance-based systems.
Leave policies
Maryland has extensive laws regarding various types of leave. An employer with 15 or more employees may be required to allow an employee to use earned paid leave to care for an immediate family member who is ill, as stipulated by the Maryland Flexible Leave Act (MFLA).
Under the Parental Leave Act (PLA), employers with 15 to 49 employees must allow eligible employees to take up to six workweeks of unpaid leave in any 12-month period for the birth of the employee’s child or the placement of a child with the employee for adoption or foster care.
The Maryland Healthy Working Families Act (MHWFA) mandates that employers with 15 or more employees provide paid sick leave. For employers with fewer than 15 employees, this leave can be unpaid.
Leave type | Duration | Paid/Unpaid |
Family leave (MFLA) | As per available paid leave | Paid |
Parental leave (PLA) | Up to six weeks | Unpaid |
Sick leave (MHWFA) | Up to five days per year | Paid/Unpaid depending on employer size |
Military leave | As needed | Unpaid |
Organ donor leave | Up to 30 days for organ donation; up to seven days for bone marrow donation | Paid |
Termination laws
Maryland follows the at-will employment doctrine, meaning that either party in the employment relationship may terminate it at any time, for any lawful reason. However, there are exceptions to this rule. For instance, an employer may not discharge an employee for discriminatory reasons or as retaliation for lawful activities such as whistleblowing. If a written contract or company policy specifies the circumstances under which an employee may be fired, the employer must stick to these terms.
When terminating an employee in Maryland, employers must provide all due wages by the next regular payday. This includes overtime and vacation pay if applicable.
Maryland does not have a state law regarding severance pay. Therefore, unless stipulated in an employment contract or company policy, employers are not required to provide severance pay to terminated employees.
Easily onboard employees in Maryland?
Safety and health
Maryland employers are required by the Maryland Occupational Safety and Health Act or OSHA to provide a safe and healthy working environment for their employees. This includes maintaining current lists of hazardous chemicals present on job sites, providing safety training in certain circumstances, and taking measures to assure safety for employees who work within close proximity of high-voltage wires.
Maryland requires all employers to maintain a smoke-free workplace and prohibits texting and using handheld phones while driving.
Taxes in Maryland
Employers in Maryland are responsible for withholding federal and state income taxes from their employees’ wages. The state income tax rate ranges from 2% to 5.75%.
Employers also have obligations relating to the Unemployment Insurance Tax and the Employment Training Tax. Social Security tax and Medicare tax should also be withheld per federal requirements.
Type of tax | Employer contribution | Employee contribution |
Federal income tax | Varies | Varies |
State income tax | N/A | 2-5.75% |
Social security tax | 6.2% up to $137,700 | 6.2% up to $137,700 |
Medicare tax | 1.45% on all wages | 1.45% on all wages |
Unemployment insurance tax | 2.2% to 13.5% on first $8,500 of wages | N/A |
Managing Maryland employees with an Employer of Record (EOR)
When it comes to employing people in Maryland, it’s crucial to understand and comply with the state’s complex employment laws. With various state-specific regulations impacting areas like diversity, employee relations, wage and hour, health and safety, and organizational exit, navigating the legal landscape can be a challenging task.
That’s where Multiplier comes in. With our Employer of Record (EOR) solution, businesses hiring from abroad can legally employ full-time workers in Maryland and other parts of the U.S. without setting up local entities.
And with our global payroll platform, you can process payroll not only for all your employees, local and international, on time while managing local taxes, contributions, and withholdings.
Take the complexity out of HR compliance in Maryland by partnering with Multiplier. Book a demo today.
FAQs
Maryland Fair Employment Practices Act (FEPA) prohibits employers having 15 or more employees from discriminating based on protected characteristics like race, color, religion, sex, sexual orientation, gender identity, age, national origin/ancestry, marital status, disability unrelated to job performance, and genetic information. Discriminatory harassment is also illegal under FEPA.
Maryland law requires employers to provide a written notice of pay rate, regular paydays, and any leave benefits to the employee at the time of hiring. Moreover, wage deductions are only allowed under specific circumstances, including court orders, deductions authorized by Maryland Division of Labor and Industry Commissioner, or those authorized under federal or state law. Healthcare continuation coverage must also be offered to individuals who lose group coverage due to certain qualifying events.
Maryland’s paid family and medical leave insurance (PFML) program provides eligible employees with benefits during certain qualifying events. Other leave laws include the Maryland Flexible Leave Act (MFLA), which allows employees to use paid leave to care for an immediate family member who is ill, and the Parental Leave Act (PLA), which provides six workweeks of unpaid leave for the birth of a child or adoption.
Under the Maryland Occupational Safety and Health Act, employers are required to provide a safe and healthful workplace. They must maintain lists of hazardous chemicals on a job site, provide safety training when necessary, and assure safety for employees working near high-voltage wires. Furthermore, smoking is prohibited in indoor workplaces and texting while driving is illegal.
Under Maryland law, employers must pay all wages due to terminated employees by the next regular payday. However, an employer is not required to pay accrued leave to a terminated employee if it meets certain policy and notification requirements.
