New Employment Laws in Maryland: What HR Pros Need to Know

From the underwater grasses of the Chesapeake Bay to the towering majesty of the Blue Ridge Mountains, Maryland is rich in ecology. With one of the country’s busiest ports and its proximity to Washington, D.C., the state is also rich in its economy, with a gross domestic product of nearly $526 billion, which places it 17^th nationwide.

In 2023, Baltimore was designated a federal Workforce Hub. This designation means the city will receive federal, state, and private-sector funding to generate quality employment opportunities for residents and improve transportation infrastructure such as the Amtrak rail service.

As they focus on making the most of Maryland’s thriving environment, business owners and their HR teams can’t lose track of the basics, such as compliance with state and federal labor laws. Whether it’s well-publicized minimum wage increases or subtler changes such as the recent and evolving ban on non-compete agreements for workers earning less than $46,800 per year, failing to follow all employment laws can have serious consequences. Lawsuits, financial penalties, damage to the company’s reputation, and unhappy, unproductive employees are just some of those potential risks

Maryland labor statistics

• Top industries (by % GDP):

o Government and government enterprises ($83.75 billion)

o Finance, insurance, real estate, rental, and leasing ($82.5 billion)

o Professional and business services ($68.86 billion)

• 2.7% unemployment rate (US rate 4%)
• $90,203 average household income
• 2.7 million people employed

9 Maryland labor laws employers need to know

Agricultural labor laws:

In addition to being one of the country’s top producers of poultry, Maryland farms also provide corn, soybeans, dairy products, and many other agricultural crops. Whatever they harvest, Maryland farm employers need to be aware of several critical aspects of agricultural employment law to reap the rewards of complying with regulations and protecting their workers' rights and safety.

Minimum wage and overtime:

Agricultural employers must comply with the state’s minimum wage, currently $15 per hour. Exceptions can be made if the employer meets certain criteria, such as being involved in canning, freezing, packing, or processing specific perishable or seasonal commodities. In general, farm workers are eligible for overtime only after they work more than 60 hours a week.

Maryland Healthy Working Families Act (MHWFA):

Agricultural businesses with at least 15 workers must provide employees with one paid hour of sick leave for every 30 hours worked, up to 40 hours a year. Employers with fewer than 15 employees must provide unpaid sick leave.

Migrant and Seasonal Agricultural Worker Protection Act (MSPA):

This federal legislation guarantees housing, transportation, disclosure of working conditions, and recordkeeping for migrant and seasonal agricultural workers in Maryland and nationwide.

Workplace safety and health:

US Occupational Safety and Health Administration (OSHA) and Maryland Occupational Health and Safety (MOSH) standards require agricultural employers to ensure safe working conditions, proper training on equipment use, and compliance with pesticide application and soil contamination regulations to protect agricultural workers from a variety of inherent hazards.

Child labor:

All minors under the age of 18 need a permit to work in Maryland. They must be paid at least 85% of the state minimum wage, or $12.75 per hour in 2024.

Employers also need to comply with working hour limitations that enforce the state’s commitment to balancing youth work opportunities with the need for school and rest:

For minors aged 14 and 15:

• Can’t work more than three hours on school days, 18 hours during school weeks, or 40 hours during non-school weeks.
• The school year restrictions of working only between 7 a.m. and 7 p.m. extend to 9 p.m. from June 1 to Labor Day.
• Youths are prohibited from working more than eight hours a day, or more than 40 hours a week during school breaks.
• If they work more than five consecutive hours, they must be given a non-working break of at least 30 minutes.

For minors aged 16 and 17:

• May not exceed 12 combined hours of work and school per day, and must have at least eight consecutive hours of non-work, non-school time in each 24-hour period.
• If they work more than five consecutive hours, they must be given a non-working break of at least 30 minutes.

Family and Medical Leave Insurance (FAMLI):

Maryland employers must follow the federal Family and Medical Leave Act (FMLA) provisions, which include providing unpaid, job-protected leave for up to 12 weeks for bringing a child into the family or dealing with a personal or family member’s serious health condition.

Maryland recently approved the paid, job-protected Family and Medical Leave Insurance (FAMLI) program, which is one of the most comprehensive and progressive leave policies in the country. FAMLI will let employees who have worked at least 680 hours in the past four calendar quarters take up to 12 weeks to care for a newborn, adopt a child, or deal with a serious health condition (their own, a family member’s, or domestic partner’s). It will allow up to 24 weeks in a calendar year in which an employee gives birth and also needs to deal with a serious health condition. Payroll deductions will begin on July 1, 2025, with benefits starting on July 1, 2026.

Businesses in Maryland should begin planning now to ensure their operations will comply with this new legislation.

Minimum wage:

The best things in life are surely free, but we still all deserve an honest day's pay for an honest day's work. Effective January 1, 2024, Maryland’s Fair Wage Act of 2023 increased the state's minimum wage to $15 per hour, with a few exceptions:

• Minors under the age of 18 must be paid at least 85% of the state’s minimum wage, or $12.75 an hour.
• Tipped employees must receive at least $3.63 per hour, or whatever is required to ensure workers’ total earnings including tips equal at least $15 per hour.
• Some jurisdictions have set their own rates; for example, Montgomery County adjusted its minimum hourly wage requirements on July 1, 2024, to $17.15 for employers with at least 51 people, $15.50 for employers with 11 to 50 people, at least $4.00 for tipped employees (with the requirement for the employer to cover any shortfalls to ensure these workers receive the full minimum wage).

Pay transparency:

The trend toward pay transparency is spreading across the country, and Maryland is joining the bandwagon. Starting October 1, 2024, employers in the state must disclose the wage range for any job posting, as well as to current employees or applicants upon request. The law applies to jobs physically performed in Maryland or those reporting to a Maryland-based supervisor or office. HR leaders, hiring managers, and others involved in the recruitment process should be aware of this requirement and ready to proactively and reactively share wage information.

Stay ahead of compliance updates with BambooHR^®

But knowledge is power. BambooHR, empowers you and your team with our robust information management platform that offers all the information you need in a user-friendly format. With centralized employee records, automated workflows, and comprehensive compliance tracking for the Fair Labor Standards Act (FLSA), the Health Insurance Portability and Accountability Act (HIPAA), Equal Employment Opportunity (EEO) requirements, and all other relevant state and federal regulations, you can enjoy the peace of mind that comes with knowing your business’s employment practices are always on track.