Maryland overtime laws provide a framework for employers to follow to pay employees when they work over 40 hours a week. Maryland’s regulations on overtime pay are pivotal for employers to understand and comply with in 2024. According to Maryland labor law, employees are generally entitled to receive overtime pay at 1.5 times their regular hourly wage for hours worked beyond the standard 40-hour workweek.
For employers, it is essential to fulfill this entitlement to overtime pay as it is a critical aspect of labor law that ensures fair compensation for employees working extended hours. We created this guide to help employers understand Maryland overtime laws and their implications to avoid potential legal complications.
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Maryland Minimum Wage
The Fair Wage Act of 2023, passed by the General Assembly in May 2023, has significantly increased Maryland’s minimum wage by $15 per hour from January 1, 2024. The Fair Wage Act of 2023 expedited the planned increase set for January 1, 2025.
The new act marks a substantial rise from the former rates of $13.50 per hour for larger employers with 15 or more employees and $12.80 for smaller businesses. However, the minimum wage for tipped employees remains unchanged at $3.63 per hour.
Montgomery County has a distinction where employers with more than 50 employees should pay a minimum wage of $17 per hour. Also, in the country, tipped employees must be paid $4 per hour.
Depending on the location of your business, compliance with these wage standards is critical to avoid legal liabilities, including treble damages and criminal penalties in some cases.
Tipped Minimum Wage
A tipped employee works in an industry where they regularly and customarily receive tips amounting to $30 per month.
As of 2024, Maryland’s tipped minimum wage is $3.63 per hour. This rate is applicable across the state, regardless of the employer’s size. No change is made to the tipped minimum wage under the Fair Wage Act of 2023. However, this minimum wage is applicable as long as the tipped employees earn at least $12.50 per hour, including tips.
Subminimum wage
In Maryland, employees under 20 can be paid the subminimum wage. Under these regulations, new employees under 20 can be paid a minimum wage of $4.25 for the first 90 days.
Minimum Wage Regulation also states that full-time high school or college students can be paid a minimum wage of $10.63(no less than 85% of the regular minimum wage rate for up to 20 work hours per week).
Exceptions to minimum wage
Specific categories of employees are exempted from the minimum wage regulations. These exceptions include:
- Agricultural workers and some agricultural branches
- Food and drink establishments with annual earnings of less than $400,000.
- Outside salesmen
- Minors and volunteers in charitable, educational, and religious organizations
- Drive-in theatre workers
- Industries involved in the canning, freezing, and packing of fruits, vegetables, seafood, or poultry
Employers in these sectors must familiarize themselves with the specific details of the federal and state minimum wage laws because, according to the Fair Labor Standards Act (FLSA), if an employee is subjected to federal and state minimum wage laws, then the employer must pay whichever is higher.
Payment laws
Maryland labor laws mandate that employers pay their employees at least twice a month on predetermined dates. Executive, professional, and administrative employees are exempted from this regulation and can be paid less frequently based on employment agreements.
In June 2021, Maryland passed the Secure Maryland Wage Act, which increases the minimum wage for employees working in specific locations with heightened security interests, like Baltimore-Washington International Thurgood Marshall Airport and Pennsylvania Station. Employees working in these locations earn a minimum wage of $13.50 per hour, with annual increases. These changes address high turnover and attract more people to work as janitors, non-TSA security officers, ramp workers, ticker agents, etc.
Maryland living wage law
- Maryland’s Living Wage Law is a notable regulation applied to all private businesses that contract with the state government. According to the law, employers working on state contracts must pay their employees a living wage above the standard minimum wage. The applicability of this law is based on the nature of the contract, specifically:
- Maryland living wage law applies to service contracts with the state valued at $100,000 or more.
- Employees who spend 50% of their time on government contracts. Employees not working on such projects are not eligible for higher wages.
- Additionally, the living wage varies by county. Anne Arundel County, Baltimore City, Baltimore, Howard, Montgomery, and Prince George’s counties provide a living wage rate of $14.55 per hour, while all other counties offer $10.93.
Overtime Laws in Maryland
Maryland has no specific overtime laws and applies federal Fair Labor Standards Act laws to all employers. Simply put, Maryland overtime laws mandate that all employers pay 1.5 times the regular wage for hours worked over 40 a week. It applies to all types of employment and industries, with some exceptions, including certain salaried employees, workers in specific care institutions, and recreational establishments.
Employers must understand that Maryland overtime laws don’t recognize 8-hour per-day schedules for overtime. To be eligible for overtime pay, employees must have worked over 40 hours per week.
Break laws
- Maryland has no laws for breaks, and it is solely on employers’ discretion to allow for such breaks. The only exception is for minor workers, who must be provided 30 minutes for every 5 hours worked. Still, most employers in the state provide rest and meal breaks to ensure a productive workforce.
- Employees who provide work and meal breaks must follow federal standards. Employers should compensate employees if they work through meal times, and if no work is performed during meal breaks, they can be unpaid. For retail establishments with 50 or more employees, the Maryland Healthy Retail Employee Act mandates certain breaks based on the length of the work shift.
- Employers should ensure compliance with these laws.
Maryland breastfeeding laws
No Maryland state laws for breastfeeding breaks exist. As a result, federal breastfeeding laws are applicable.
All employers should provide non-exempt (hourly) employees reasonable break times for breastfeeding for up to one year after the child’s birth. As per federal standards, employers must provide a private space (other than a bathroom) for breastfeeding. However, there are no guidelines on the duration and frequency of these breaks. The employer can determine it.
Furthermore, small businesses with fewer than 50 employees may be exempt from providing breastfeeding breaks and arrangements if they can demonstrate significant hardship.
Leave requirements
Maryland has a full spectrum of employee leave requirements, including required and non-required leaves. The state follows the Maryland Healthy Working Families Act and federal FLSA laws to ensure workers get enough leaves for work-life balance.
Required leaves in Maryland
- Sick and family leave:
Sick and family leave is mandatory in Maryland, and all employers are required to provide sick leave. As per the regulations, employer sick leave accrues at 1 hour for every 30 hours worked. As a result, employees can accrue up to 40 sick leave hours in a year. This leave allows employees to take time off for personal illness, to care for a sick family member, or parental leave related to the birth or adoption of a child.
Employers with 15 or more employees must provide paid sick leave, while those with 14 or fewer employees should offer unpaid sick leave.
- Jury duty leave
Federal as well as Maryland Code, Court and Judicial Proceedings provide legal protection for employees serving jury duty. Employees must be provided leave for jury duty without any hassle and should be reinstated when they return.
- Voting time leave
During elections, employees in Maryland have the civil right to be granted time off to vote. Employers must provide 2 hours of paid voting time to ensure employees can fulfill their civic duty. However, employers can ask employees to provide proof of voting.
- Domestic violence or sexual assault leave
This leave is for employees who are victims of domestic violence, sexual assault, or stalking. It allows time off for medical care, legal proceedings, or dealing with the aftermath of such incidents. Employees can use their paid sick leave hours in these circumstances if they or a family member suffers from domestic or sexual violence or stalking.
- Emergency response leave
Employees of emergency response teams such as the Civil Air Patrol, volunteer firefighters, or any civil defense organization are entitled to leave to respond to emergencies. No employer can take retaliatory actions such as demoting, cutting pay, or discharging such employees from their jobs. These employees are entitled to adequate time off as a response to emergency events declared by the Governor. For state employees, emergency response leave can be up to 15 days per year if certified American Red Cross volunteers and their services are needed for a Level 2 or higher-level disaster.
- Organ and bone donation leave
Maryland requires that all private employers support charitable acts such as organ or bone marrow donation by ensuring employees can take the necessary time off for medical procedures and recovery.
Private employees must be provided up to 60 days of unpaid leave for organ donations and 30 days for bone marrow donation. For state employees, the limit is 30 days for organ donations and 7 days for bone marrow donation.
- Military leave
Maryland military law facilitates employees’ commitments to the National Guard or Reserves. Employers are required to provide 15 days of paid leave for deployment or military training. This leave is essential for allowing service members to fulfill their military obligations.
Non-required leaves
Non-required leaves can also be part of the employment contract. Such leaves are offered at the employer’s discretion and are not legally mandated. However, employers must communicate their leave policies to employees and administer them fairly and consistently to avoid potential disputes or legal challenges.
- Bereavement leave
Employers can choose to provide unpaid time for employees to grieve and manage affairs following the death of a close family member.
- Vacation leave
Vacation leave can be offered to improve work-life balance and offer employees a chance for rest and recovery.
- Holiday leave
It recognizes federal and state holidays. While private employers are not legally required to do so, public employers must offer 11 paid holidays annually
Child labor laws
Maryland’s child labor laws regulate the employment of minors to ensure their safety and well-being. As per these laws, children under 14 are not permitted to work.
For minors aged 14-17, certain restrictions apply:
- All minors between 14 and 17 must get a work permit from the Maryland Department of Labor.
- They can work 3 hours a day during a school day and 8 hours on non-school days.
- They can only work between 7 a.m. and 7 p.m. except on Labor Day, when they can work until 9 p.m.
For minors aged 16 and 17:
They are also required to get work permits.
Their work hours have fewer restrictions and depend on the nature of work. However, they must have 8 consecutive hours of rest per 24 hours for health and well-being.
Additionally, no minor can be employed in prohibited occupations that include:
- Manufacturing plants related to explosives
- Logging, mining, or working with power-driven machinery
- Operating heavy machinery like lifts, elevators, etc.
- Machinery maintenance
- Blast furnaces
- Working at docks or railroads
- Driving motor vehicles
- Erection and repair of electrical components
- Distilleries
Hiring laws
Maryland’s hiring laws govern various aspects of the recruitment and hiring process, ensuring fairness and equal opportunity for all job applicants. The state follows The Job Applicant Fairness Act that provides no candidate is discriminated against based on protected characteristics such as race, gender, religion, age, disability, and national origin. The act also prohibits employers from asking employees for credit reports to make hiring decisions.
Termination laws
In Maryland, termination laws are as per the “employment-at-will” doctrine. It allows either the employer or the employee to end the employment relationship at any time, for any reason, or no reason at all, as long as the termination is not illegal. However, this does not permit termination based on discriminatory or retaliatory reasons.
Discrimination laws
Maryland has a very robust anti-discrimination law to protect the rights of employees. No employer can have discriminatory practices based on race, color, religion, gender, national origin, age, marital status, sexual orientation, gender identity, genetic information, or disability.
The State of Maryland Commission on Civil Rights ensures equal employment opportunities. It protects workers from unfair treatment or biases in hiring, promotion, job assignments, termination, and other aspects of employment.
Occupational safety
Maryland follows the federal Occupational Safety and Health Act (OSHA) guidelines and state-specific regulations under Maryland Occupational Safety and Health (MOSH).
MOSH provides employers with resources that provide guidelines for on-site inspections, consultations, educational programs, and outreach to ensure workplace safety and health. The law focuses on setting and enforcing standards and collaborates with businesses to improve safety measures.
Understanding and implementing these safety standards will help employers to provide a safe working environment and comply with legal requirements.
Miscellaneous laws
Maryland also has several miscellaneous labor laws that employers must be aware of. It includes:
1. Whistleblower protection laws: Maryland whistleblower laws apply to only public employees, and private employees are not protected under these laws. These regulations protect public employees from retaliation for reporting illegal activities such as mismanagement of public resources and violating laws.
2. Background check laws: Maryland is one of the states that follows the Ban the Box legislation, which restricts employers from asking about criminal history until the first in-person interview for companies with 15 or more employees.
3. Social media regulations: Maryland has the Username and Password Privacy Protection Law that ensures employers do not violate employee privacy rights. Employers can only ask for login details from employees to monitor or investigate employees’ work computers.
4. Drug and alcohol testing: There are several regulations regarding drug and alcohol testing in Maryland.
- Employers can discipline an employee for using Marijuana for medical purposes at work.
- Collect bodily samples such as blood and saliva but not breath testing.
- Employers can collect and test controlled substances as long as a licensed laboratory performs these activities.
5. Sexual harassment training: Employers are encouraged or required to provide training to prevent sexual harassment in the workplace. Additionally, Maryland’s anti-harassment training laws mandate that all public employees must undergo 2 hours of sexual harassment prevention training in the first six months of their service and then every two years.
6. COBRA laws: Maryland follows the Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Maryland Continuation Coverage (MCC) laws for offering health coverage to employees. As COBRA applies to employers with 20 or more employees, MCC applies to employers with fewer than 20 employees.
7. Expense reimbursement laws: According to Maryland Department of Budget and Management guidelines, employers should reimburse employees for work-related expenses, which include meal allowances, transportation tips, porter fees, and hotel tips.
8. Record-keeping laws: The Maryland Department of Labor mandates that all employers maintain accurate employment records in compliance with state and federal laws.
How can Truein help with Overtime Pay management?
Truein’s comprehensive work-hour tracking capabilities can help employers manage overtime pay effectively. Truein is a cloud-based facial recognition attendance system that can streamline payroll and overtime calculation and ensure compliance with state regulations.
With Truein, employers can automate time tracking, monitor employee hours, calculate overtime pay accurately, and generate detailed reports for payroll purposes. By leveraging Truein’s intuitive platform, employers can minimize errors, reduce administrative burden, and ensure timely and accurate payment of overtime wages to employees.
Conclusion
Maryland overtime laws are part of the complex labor laws that the state has in place to protect the rights and well-being of the employees. For employers in the state, it’s essential to understand these regulations to avoid legal pitfalls and promote a fair and compliant workplace.
Truein can help comply with labor laws ranging from minimum wage requirements to overtime laws, leave provisions, and beyond.
