The rules that change as your headcount grows — minimum wage, overtime, paid sick leave, FMLA, harassment training, workers' comp, MD wage payment laws. Built as a practical reference for Maryland employers, not a legal treatise.
Important: Maryland employment law changes regularly. Every number, threshold, and rate in this guide should be verified against the current Maryland Department of Labor, Comptroller, and federal Department of Labor publications before you rely on it.
This guide is educational. It is not legal advice. For situations involving termination, harassment claims, classification disputes, or wage complaints, consult a Maryland employment attorney.
For most things, Maryland law is stricter than federal. Where they overlap, you follow the stricter one. The four big federal frameworks — FLSA (wage & hour), FMLA (leave), Title VII / ADA / ADEA (anti-discrimination), OSHA (safety) — all apply on top of MD-specific statutes like the Maryland Healthy Working Families Act and the Maryland Wage Payment and Collection Law.
The single most useful mental model is to track obligations by employee count. As you cross thresholds (1, 5, 15, 20, 50 employees), new laws kick in. The matrix at the end of this guide lays that out.
As of January 1, 2024, the Maryland state minimum wage is $15.00 per hour for all employers regardless of size. (Verify before relying.) A handful of counties have their own minimum wage rules that go higher — Montgomery County in particular sets its own scaled minimum wage by employer size.
Tipped wages: tipped employees can be paid a lower direct cash wage ($3.63/hour in MD as of last published rate — verify) as long as tips bring them to at least the full minimum wage. If not, the employer makes up the difference.
Under FLSA, non-exempt employees must receive 1.5x their regular rate for hours worked over 40 in a workweek. Maryland follows the same rule. There is no daily overtime rule in Maryland (unlike California). Salaried-exempt status requires both a salary floor (federal threshold — verify current figure) and meeting one of the duties tests (executive, administrative, professional, computer, outside sales).
The most common mistake: classifying salaried workers as exempt without meeting the duties test. Title doesn't matter; what they actually do matters.
Maryland's MHWFA applies to all employers. The rule depends on size:
"Safe leave" covers domestic violence, sexual assault, or stalking situations — for the employee or a family member. Sick leave covers the employee or a family member (broadly defined).
You can satisfy this with a single PTO policy, as long as it accrues at least as generously and can be used for the protected reasons. The most common compliance miss: not letting employees use accrued time without doctor's notes for short absences, or requiring shift coverage as a condition of use.
FMLA applies once you hit 50 employees within a 75-mile radius. It provides up to 12 weeks of unpaid, job-protected leave for serious health conditions, new children, military caregiver duties, etc. Reduced-schedule and intermittent leave are also covered.
Maryland does not currently have its own paid family leave program in active operation (the FAMLI program — Family and Medical Leave Insurance — was enacted but has a phased implementation; contributions and benefits dates have shifted; verify current status before relying). When FAMLI is fully operational, it will be a payroll-tax-funded paid leave benefit run by the state.
Maryland's WPCL is one of the most employee-friendly wage statutes in the country. Two things you should know cold:
Vacation payout on termination: MD does not require employers to pay out unused vacation, but if your written policy says you will (or is silent), you must. Audit your handbook against actual practice.
The federal frameworks (Title VII, ADA, ADEA, GINA, Equal Pay Act, Pregnancy Discrimination Act) apply to most employers in stages: Title VII and ADA at 15 employees, ADEA at 20. Maryland's parallel statute, the Fair Employment Practices Act (FEPA), applies at 15 employees and covers a broader set of protected classes than federal law — including sexual orientation, gender identity, and military status, among others.
Practical implications:
Maryland requires workers' comp coverage for nearly all employers with 1 or more employees. Sole proprietors and LLC members can elect in or out. There is no minimum-size exemption like some states have.
Premium rates vary by classification code — office work runs in the 0.3–1% of payroll range; trades and construction can run 5–15%+ depending on classification. Get quotes from at least two carriers, or use the Injured Workers' Insurance Fund (IWIF / Chesapeake Employers' Insurance) as a baseline. (Verify current rates with your insurance broker.)
Maryland UI is administered by the Maryland Department of Labor (formerly DLLR). Standard new-employer rate is 2.6% on the first $8,500 of each employee's wages (the MD UI wage base). After three years of MD payroll history you get an experience rating that can go up or down. (Verify current rate — new-employer and experience-rated tables are updated annually.)
UI is paid quarterly (by the end of the month following quarter-end: April 30, July 31, October 31, January 31). Late filings rack up penalties quickly.
This is the area where small Maryland employers get hit hardest. Maryland uses the ABC test for UI purposes (and most wage-and-hour purposes): a worker is an employee unless all three of these are true:
The federal IRS uses a softer "control" test, but MD's ABC test is what matters for state taxes and benefits. If your "contractor" works full-time, exclusively for you, doing core work — you likely have an employee.
Misclassification consequences: back UI taxes, back workers' comp premiums, treble damages under WPCL if they're underpaid, penalties. Get this right.
Maryland employers must display certain notices in a conspicuous place (or distribute electronically to remote workers). The main ones:
The Maryland Department of Labor publishes a consolidated poster you can order or print free. Federal posters come from the U.S. Department of Labor. Update annually — the minimum wage poster changes when the rate changes.
| Headcount | What newly applies |
|---|---|
| 1+ | FLSA wage & hour, OSHA, FICA, FUTA, MD UI, MD workers' comp, MD income tax withholding, MD new-hire reporting, MD Wage Payment & Collection Law, MD wage rate notice at hire, MHWFA (unpaid leave if <15) |
| 5+ | Best practice: written handbook, anti-harassment policy, time-tracking system. (Not a statutory threshold — an operational one.) |
| 15+ | MHWFA paid sick & safe leave (vs unpaid below 15). Federal Title VII, ADA, GINA, Pregnancy Discrimination Act. Maryland FEPA. |
| 20+ | Federal ADEA (age discrimination). COBRA (group health continuation). |
| 50+ | Federal FMLA (12 weeks unpaid job-protected leave). EEO-1 reporting (if federal contractor or otherwise meet criteria). ACA employer mandate (offer affordable health coverage to FTEs). |
| 100+ | EEO-1 reporting (private employers). WARN Act (60-day notice on mass layoffs or plant closings). |
The matrix above is a starting reference. Specific statutes have nuances — "employee" is defined differently across them, joint-employer rules can pull related entities together, and Maryland thresholds can differ from federal. Verify before relying.
Enter your entity, county, and what applies to you. We'll generate the year's filings (including MD UI quarterlies and W-2/1099 deadlines) and let you download them to your calendar.
Launch the tracker →The areas where DIY usually goes wrong:
Want help thinking through your HR setup?
CBC works with Maryland businesses on the operational side of HR — handbook gap analysis, classification audits, onboarding setup, training rollouts. For legal advice on a specific situation, we'll point you to a Maryland employment attorney.
Book a working session →This guide is educational. It is not legal advice. Maryland and federal employment law change frequently — verify all figures, thresholds, and effective dates against current Maryland Department of Labor, Comptroller of Maryland, and U.S. Department of Labor publications before relying on them. For specific employment situations, consult a Maryland-licensed attorney.