Maryland Labor Laws

Maryland Minimum Wage

The current minimum wage in Maryland is $11.75 per hour, which is higher than the federal minimum wage of $7.25 per hour as required by the Fair Labor Standards Act. When there is a discrepancy between federal and state laws, businesses must pay employees the higher rate.

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History of Maryland Labor Laws

The current minimum wage requirements under the Maryland Minimum Wage and Overtime Law took effect on January 1, 2021.

Hourly rates have been increasing over the years:

  • $8.25 on July 1, 2015
  • $8.75 on July 1, 2016
  • $9.25 on July 1, 2017
  • $10.10 on July 1, 2018

Maryland has passed laws to raise the minimum wage to $15 per hour, with large businesses facing increases more quickly than small businesses.

For large employers (15 or more employees):

  • $11.75 effective January 1, 2021
  • $12.50 effective January 1, 2022
  • $13.25 effective January 1, 2023
  • $14.00 effective January 1, 2024
  • $15.00 effective January 1, 2025

For small employers (14 or fewer employees):

  • $11.60 effective January 1, 2021
  • $12.20 effective January 1, 2022
  • $12.80 effective January 1, 2023
  • $13.40 effective January 1, 2024
  • $14.00 effective January 1, 2025
  • $14.60 effective January 1, 2026
  • $15.00 effective January 1, 2026

Municipality Minimum Wage Laws

Maryland allows municipalities to set their own wage rates, which means businesses in the state may need to comply with multiple laws. Two Maryland municipalities have their own minimum wage laws:

  • Montgomery County: As of July 1, 2021, the hourly rates are $15 for large employers (51 or more employees), $14 for mid-sized employers (11 to 50 employees), and $13.50 for small employers (10 or fewer employees).
  • Prince George’s County: Employers of all sizes must pay an hourly wage of $11.50. Starting January 1, 2021, the state minimum wage will apply.

Maryland Minimum Wage Exemptions

Some workers in Maryland may be exempt from the $11.75 per hour minimum wage, according to the Maryland Department of Labor. Minimum wage exemptions apply to:

  • 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

Additionally, certain industries are exempt from the state minimum wage law:

  • 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

A recent change effective June 1, 2019, requires amusement and recreational establishments to pay employees the full minimum wage rate, rather than 85% of that rate as previously allowed.

Maryland Posting Requirements

In Maryland, employers are required to display specific information about labor laws. This includes various posters and notices covering:

  • 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

In Maryland, businesses may use a tip credit against the state minimum wage for tipped employees. A tipped employee is defined as someone who earns more than $30 per month in tips. The combined cash wage and tip credit must meet or exceed the state minimum wage. Currently, the minimum cash wage in Maryland is $3.63 per hour, making the maximum tip credit $7.37.

Recent change: In 2019, legislation was passed affecting restaurants that use a tip credit. These restaurants must now provide employees with written or electronic wage statements. These statements should show the effective hourly tip rate, including employer-paid cash wages and all reported tips, for all tip credit hours worked each workweek in the pay period. The Maryland Department of Labor, Division of Labor and Industry, has proposed regulations to enforce this requirement.

Overtime Wage in Maryland

Maryland’s overtime law is similar to the federal Fair Labor Standards Act, requiring employees to be paid 1.5 times their usual hourly rate for hours worked over 40 in a workweek. However, there are some exceptions to this 40-hour threshold:

  • Bowling establishments: Overtime is required after 48 hours per week.
  • Institutions (excluding hospitals): Providing on-premise care to the sick, aged, or individuals with disabilities must pay overtime after 48 hours per week.
  • Agricultural workers: Overtime is required after 60 hours per week.

Certain workers are exempt from the state overtime law altogether, including:

  • Taxicab drivers
  • 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
  • Trainees in public school special education programs
  • Non-administrative employees of organized camps

Additionally, some industries are exempt from the state overtime law:

  • Seasonal amusement and recreational establishments meeting specific criteria
  • Nonprofit concert promoters, theaters, music festivals, music pavilions, or theatrical shows
  • Employers subject to certain railroad requirements of the U.S. Department of Transportation, the Federal Motor Carrier Act, and the Interstate Commerce Commission
  • Establishments selling food and drink for on-premises consumption 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 must be followed in Maryland:

Minimum  Wage

  • Employees under 18 years of age must be paid at least 85% of the state minimum wage rate.

Working Hours For Minors

Maryland has specific laws regarding the hours minors can work, which differ from federal regulations. Employers should follow the stricter rules.

Minors 14 and 15 Years of Age

Under Maryland law, they may not:

  • Work more than 4 hours on any day or more than 23 hours in any week when school is in session.
  • Work more than 8 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 5 consecutive hours without a non-working period of at least 30 minutes.

Federal child labor law states that 14- and 15-year-olds may not:

  • Work more than 3 hours on a school day, including Fridays.
  • Work more than 8 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.).

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 8 consecutive hours of non-work, non-school time in each 24-hour period.
  • May not work more than 5 consecutive hours without a non-working period of at least 30 minutes.

Federal law does not restrict the hours or times of day that 16- and 17-year-olds may work.

Employer Recordkeeping Requirements in Maryland

In Maryland, businesses must adhere to specific recordkeeping rules to ensure compliance. Employers are required to keep the following information for three years:

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

Maryland Labor Law Questions & Answers

In Maryland, whether an employer has to pay for unused vacation time depends on the company’s written policy and when employees were informed about it. If the policy clearly states that unused vacation leave will be forfeited upon termination and this was communicated at the time of hiring, then the employee cannot claim it. Without such a policy, the employee is entitled to the cash value of any unused earned vacation leave, provided it was otherwise usable.

Unused sick leave, however, is different. It is intended for situations involving sickness and medical attention and cannot be claimed at termination unless a policy or contract states otherwise.

Yes, small businesses in Maryland must pay the state minimum wage, which is currently $11 per hour. A small business is defined as an employer with 14 or fewer employees. All businesses in the state will eventually be required to pay $15 per hour, with large employers reaching this rate by 2025 and small employers by 2026.

Maryland requires that wages for work performed before termination be paid on or before the regular payday. If an employee gives notice of termination, the employer is not required to let the employee work for the entire notice period or pay for unworked time during that period.

  • 14- and 15-year-olds: When school is in session, they may not work more than 4 hours on any day or more than 23 hours in any week. When school is not in session, they may not work more than 8 hours on any day or more than 40 hours in any week.
  • 16- and 17-year-olds: They may not spend more than 12 hours in a combination of school hours and work hours each day.

Maryland’s overtime law is similar to the federal Fair Labor Standards Act, with some exemptions for executive, administrative, and professional employees. These exempt workers must receive a salary, but the salary threshold differs: $684 per week federally and $455 per week in Maryland. Employers should follow the law that benefits the employee more.

Businesses cannot deduct from exempt employees’ wages for missed work of less than a full day, but Maryland law allows deductions from accrued leave reserves, such as vacation and sick time.

Maryland Labor Law Posters

Simplify labor law compliance and make workplace policies visible with J. J. Keller state and federal labor law posters. 

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Labor Law Posters