Maryland Labor Laws

Updated: 03/09/2020

Maryland Minimum Wage

The current minimum wage rate in Maryland is $11 per hour. That can be compared to the $7.25 hourly wage required under the federal Fair Labor Standards Act. When there’s a difference between federal and state laws, businesses must use the higher rate to pay employees.

USA map with Maryland superimposed

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History of Maryland Labor Laws

The current minimum wage requirements under the Maryland Minimum Wage and Overtime Law took effect Jan. 1, 2020.

Hourly rates have been on the rise, reaching $10.10 on July 1, 2018, $9.25 on July 1, 2017, $8.75 on July 1, 2016 and $8.25 on July 1, 2015.

As part of a recent trend among states, Maryland has passed laws to raise the minimum wage to $15 per hour, with large businesses facing increases more quickly than small businesses.

Employers with 15 or more employees (large employers) must pay $11.75 effective Jan. 1, 2021, $12.50 effective Jan. 1, 2022, $13.25 effective Jan. 1, 2023, $14 effective Jan. 1, 2024, and $15 effective Jan. 1, 2025.

Employers with 14 or fewer employees (small employers) must pay $11.60 effective Jan. 1, 2021, $12.20 effective Jan. 1, 2022, $12.80 effective Jan. 1, 2023, $13.40 effective Jan. 1, 2024, $14 effective Jan. 1, 2025, $14.60 effective Jan. 1, 2026, and $15 effective Jan. 1, 2026.

Municipality Minimum Wage Laws

Maryland allows municipalities to set their own wage rates, which means some businesses in the state will need to make sure they comply with multiple laws. In fact, two Maryland municipalities have their own minimum wage laws.

In Montgomery County, as of July 1, 2019, the hourly rates were $13 for large employers (51 or more employees), $12.50 for mid-sized employers (11 to 50 employees) and $12.50 for small employers (10 or fewer employees). Those hourly rates will increase on July 1, 2020, based on employer size as follows: $14, $13.25 and $13.

In Prince George’s County, employers of all sizes must pay an hourly wage of $11.50. Starting Jan. 1, 2021, the state minimum wage will apply.

Maryland Minimum Wage Exemptions

Some workers on the payroll may not need to be paid $11 per hour, given that the state allows some exceptions to its law. According to the Maryland Dept. of Labor, minimum wage exemptions apply to these workers:

  • Immediate family members of employers
  • Certain agricultural employees
  • Executive, administrative and professional employees
  • Volunteers for educational, charitable, religious and nonprofit organizations
  • Employees under 16 working less than 20 hours per week
  • Outside salespeople
  • Commissioned employees
  • Employees enrolled as trainees as part of a public school special education program
  • Non-administrative employees of organized camps

In addition, employers in certain industries are exempt from the state minimum wage law. They are:

  • Certain establishments selling food and drink for consumption on the premises grossing less than $400,000 annually
  • Drive-in theaters
  • Establishments engaged in the first canning, packing or freezing of fruits, vegetables, poultry or seafood

Recent change: Effective June 1, 2019, amusement and recreational establishments must pay employees the full minimum wage rate, not 85% of that rate as in the past.

Maryland Posting Requirements

In Maryland, employers must display certain information about labor laws. That includes several posters and notices:

  • Minimum Wage
  • Child Labor
  • Equal Pay for Equal Work
  • Fair Employment
  • Health Insurance Coverage
  • Occupational Safety and Health Law—MOSH
  • Pregnant & Working
  • Earned Sick and Safe Leave
  • Unemployment Insurance
  • Workers' Compensation

Tipped Wage in Maryland

Businesses may be allowed to utilize a tip credit against the state minimum wage with tipped employees. Maryland defines a tipped employee as someone who earns more than $30 per month in tips. The cash wage plus the tip credit must equal at least the state minimum wage rate. Currently, the minimum cash wage in Maryland is $3.63 per hour; therefore, the maximum tip credit is $7.37.

Recent change: In 2019, legislation passed affecting restaurants who utilize a tip credit. These restaurants must provide employees with written or electronic wage statements so tipped employees can see the effective hourly tip rate. That should include employer-paid cash wages plus all reported tips, for all tip credit hours worked for each workweek in the pay period. As required by the 2019 legislation, the Maryland Dept. of Labor, Division of Labor and Industry, has proposed regulations regarding this restaurant tip credit wage statement.

Overtime Wage in Maryland

Maryland overtime law resembles the federal Fair Labor Standards Act in that employees must be paid 1.5 their usual hourly rate for hours worked over 40 in a workweek.

There are exceptions to the 40-hour threshold under Maryland law, though. Here are the exceptions:

  • Bowling establishments must pay overtime after 48 hours per week.
  • Institutions, other than hospitals, providing on-premise care to the sick, the aged or individuals with disabilities must pay overtime after 48 hours per week.
  • Agricultural workers must be paid overtime after 60 hours per week.

In some cases, the state overtime law doesn’t apply at all. According to the Maryland Dept. of Labor, overtime exemptions apply to these workers:

  • Taxicab drivers
  • Certain employees selling/serving automobiles, farm equipment, trailers or trucks
  • Immediate family members of employers
  • Certain agricultural employees
  • Executive, administrative and professional employees
  • Volunteers for educational, charitable, religious and nonprofit organizations
  • Employees under 16 working less than 20 hours per week
  • Outside salespeople
  • Commissioned employees
  • Employees enrolled as trainees as part of a public school special education program
  • Non-administrative employees of organized camps

In addition, employers in certain industries are exempt from the state overtime law. They are:

  • Seasonal amusement and recreational establishments that meet certain criteria
  • Nonprofit concert promoter, theater, music festival, music pavilion or theatrical show
  • Employers subject to certain railroad requirements of the U.S. Dept. of Transportation, the Federal Motor Carrier Act and the Interstate Commerce Commission
  • Certain establishments selling food and drink for consumption on the premises grossing less than $400,000 annually
  • Drive-in theaters
  • Establishments engaged in the first canning, packing or freezing of fruits, vegetables, poultry or seafood

Child Labor Laws in Maryland

For employers with minors on the payroll, special rules need to be followed.

Regarding the state minimum wage rate, employees under 18 years of age must be paid at least 85% of that rate.

Maryland has laws pertaining to hours minors can work as well. The rules differ from the federal Fair Labor Standards Act in spots, and employers should follow the rules that are stricter.

Under Maryland law, minors 14 and 15 years of age may not be employed or permitted to:

  • Work more than four hours on any day or more than 23 hours in any week when school is in session
  • Work more than eight hours on any day or more than 40 hours in any week when school isn’t in session
  • Work before 7:00 a.m. or after 8:00 p.m. (except between Memorial Day and Labor Day when the evening hour is extended to 9:00 p.m.)
  • Work more than five consecutive hours without a non-working period of at least 30 minutes

Compare that to the federal child labor law, which says in part that 14- and 15-year-olds may not:

  • Work more than three hours on a school day, including Fridays
  • Work more than eight hours on a non-school day
  • Work more than 18 hours during a week when school is in session
  • Work more than 40 hours during a week when school isn’t in session
  • Work before 7:00 a.m. or after 7:00 p.m. (except between June 1 and Labor Day when the evening hour is extended to 9:00 p.m.)

As for minors 16 and 17 years of age, under Maryland law they:

  • May not spend more than 12 hours in a combination of school hours and work hours each day
  • Must be allowed at least eight consecutive hours of non-work, non-school time in each 24-hour period
  • May not be permitted to work more than five consecutive hours without a non-working period of at least 30 minutes

By comparison, federal law doesn’t restrict the hours or times of day that 16- and 17-year-olds may work.

Employer Recordkeeping Requirements

Maryland has recordkeeping rules businesses must follow to ensure compliance.

For three years, employers must keep a record of the following information:

  • Employee’s address, race, gender and occupation
  • Rate of pay for each employee
  • Amount that is paid to each employee during each pay period
  • Hours that each employee works each day and workweek

Maryland Labor Law Questions & Answers

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