An Employer’s Compliance Starter Guide: Maryland – Justworks Help Center

Nobody ever said running a business was easy. As an employer, you have many things to handle, and compliance is just one of them.

In addition to federal regulations, each state has its own share of employment-related laws that business owners need to be aware of. Here, we’re highlighting some of these key state-specific requirements, and offering guidance to help you keep up.

Bear in mind that this list is not comprehensive, and there may be local or industry-specific employment requirements that your business needs to comply with. It’s best to consult with counsel to ensure compliance with all applicable laws, as Justworks does not provide legal advice.

Payroll Tax Accounts

Because Justworks reports state unemployment taxes on behalf of customers who utilize Justworks’ PEO services, employers will need to close their Maryland unemployment and withholding accounts prior to joining the Justworks platform. Linked here are the steps you’ll need to take: Maryland - State Unemployment Insurance.

Recruiting & Hiring Practices

Salary History Ban

All Maryland employers must disclose the wage range for a posted position upon an applicant’s request, and are prohibited from relying on a job applicant’s wage history when screening or considering the applicant for employment, using the applicant’s wage history to determine an applicant’s wages, or to inquire or seek information about an applicant’s wage history.

State Regulation

Independent Contractors

When deciding whether to classify workers as employees or independent contractors, there are a few things your business should consider, including the varying tests that apply under different federal and state employment laws, and the potential penalties and other liabilities for misclassifying employees as independent contractors.

You can read our general Help Center article on contractors and view information on how to determine if someone is a contractor or employee in Maryland in the relevant section linked below.

Mineral*: Maryland Independent Contractors

Maryland Department of Labor: Worker Classification Protection - Division of Labor and Industry

Pay Requirements

Minimum Wage & Overtime

Maryland’s minimum wage requirement is higher than the federal minimum wage. Further information about minimum wage, overtime, and other related rules and regulations in Maryland can be found here.

The localities in Maryland, listed below, have a higher minimum wage than at the state level. Where both state and local wage laws apply to an employee based on their worksite, the law that provides the employee with a higher minimum wage should be followed. Minimum wages in these localities are always changing, and this list is always growing. The best way to ensure compliance with all applicable laws is to consult with legal counsel.

Pay Parity Requirements

Maryland law prohibits employers from discriminating against employees on the basis of sex or gender identity for comparable work on the same operation, in the same business or of the same type. Exceptions to this law exist and should be reviewed for applicability.

State Regulation

Maryland Department of Labor: Maryland Equal Pay for Equal Work

Mineral*: Maryland Pay Equity and Transparency

Benefit Requirements

State Retirement Program

MarylandSaves is a state-sponsored workplace retirement program designed to give employees access to a retirement savings plan when their employer does not offer an employer-sponsored plan. You can read more about state retirement programs at the link here: State Retirement Programs.

Leave

Parental Leave

Under Maryland’s Parental Leave Act (PLA), employers must allow eligible employees to take 6 weeks of unpaid leave in a 12-month period for the birth or adoption of the employee's child. The PLA covers any employer that employs 15 to 49 employees in the state of Maryland for each workday during 20 or more calendar weeks in the current or preceding calendar year.

An employee is eligible if he or she requested parental leave and has worked:

For the employer for at least 12 months; and
For 1,250 hours during the previous 12 months.

Maryland Department of Labor: Parental Leave - Important Guidelines

Maryland Family and Medical Leave Insurance (FAMLI)

Eligible employees in Maryland will soon be able to receive partial wage payments through the state’s family and medical leave program. According to the Maryland Family and Medical Leave Insurance (FAMLI) program, employees who meet their minimum requirements will be eligible to receive compensation for up to 12 weeks to bond with a child, care for themselves or a family member with a serious health condition, or to make arrangements for a family member’s military deployment. Covered employers will be required to remit premiums and report relevant information to the state beginning in October 2025. Eligible employees will be able to claim benefits under this new law effective July 1, 2026.

Maryland Department of Labor: Family and Medical Leave Insurance

Bereavement Leave

Maryland employers with 15 or more employees must permit employees to use existing accrued paid leave (e.g. sick leave, vacation time, paid time off, compensatory time) for the care of an immediate family member who is ill or for the bereavement of an immediate family member, which is defined as an employee’s spouse, parent, or child.

Maryland Department of Labor: Flexible Leave Act

Reasonable Accommodations for Disabilities Due to Pregnancy Act

Maryland law requires employers with 15 or more employees to provide reasonable accommodation to an employee due to pregnancy that causes or contributes to a disability unless the accommodation would impose an undue hardship on the employer’s business. Covered employers are also required to post a notice to employees of their rights under the law, and to include information regarding such rights in an employee handbook.

State of Maryland Commission on Civil Rights: Pregnancy Accommodation

Sick and Safe Leave

Employers with employees both in Montgomery County and in other regions of the State of Maryland have specific paid/unpaid sick and safe leave requirements. Employers must comply with both county and state requirements for employees in Montgomery County, while only the state law impacts employees in the rest of the state.

Under the Maryland Healthy Working Families Act (MHWFA), employers with 15 or more employees must provide paid sick and safe leave for certain employees; employers with 14 or fewer employees must provide unpaid sick and safe leave. Employees are entitled to accrue 1 hour for every 30 hours worked up to a maximum of 40 hours in a year, subject to several exemptions.

[Montgomery County]

Under Montgomery County’s Earned Safe and Sick Law, eligible employees who work in the county are entitled to earn 1 hour of paid leave for every 30 hours worked up to 56 hours per year for employers with 5 or more employees. Employers with less than 5 employees must provide accrual of up to 32 hours of paid leave and 24 hours of unpaid leave per year.

Maryland Department of Labor: The Maryland Healthy Working Families Act - Employment Standards Service

Montgomery County Office of Human Rights: Montgomery County Earned Sick and Safe Leave

Mineral*: Maryland Sick Leave

Mineral*: Montgomery County, Maryland Sick Leave

Separation

Final Pay & Document Requirements

In Maryland, final wages may be issued on the next regularly scheduled payday.

Accrued, unused vacation time need not be paid out to the employee unless the employer’s policy requires it. Employers should clearly set forth in writing any policy with respect to unused vacation.

Maryland Department of Labor: Guide to Termination Pay

Maryland Department of Labor: How to file a claim for unemployment insurance benefits

Mineral*: Maryland Separation

Business Closings and Layoffs

The Federal WARN Act imposes certain notice requirements and other obligations on covered businesses before conducting large-scale business closures, layoffs, or relocations. Maryland law also requires employers to give notice to their local Office of Unemployment Insurance when laying off 25 or more employees for a common reason for more than 7 days.

For more information, visit the links below.

U.S. Department of Labor: Worker Adjustment and Retraining Notification (WARN) Act Advisor
Mineral*: Maryland Layoffs

Maryland Department of Labor: Displaced Workers: Reductions in Force - The Maryland Guide to Wage Payment and Employment Standards