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Quick and Easy Guide to Labor & Employment Law: Maryland

This state-specific guide covers labor and employment case law, statutes, rules, and regulations that HR professionals and clients often encounter or have questions about in Maryland.

At-Will Employment

In Maryland, employees work "at the will" of their employers, which means that in the absence of an express contract, agreement or policy to the contrary, an employee may be hired or fired for any reason or no reason at all. Kramer v. Mayor of Balt., 124 Md. App. 616, 633 (1999). The common law rule applicable in Maryland is that "an employment contract of indefinite duration, that is, at will, can be legally terminated at the pleasure of either party at any time." Adler v. Am. Standard Corp., 291 Md. 31, 35 (1981).

Exceptions

An employer's right to terminate an employee at any time is not absolute, and the state of Maryland recognizes several exceptions to the common law rule of at will employment.

The tort cause of action for wrongful discharge is an exception to the general rule of at will employment. Adler, 291 Md. 31 at 43. Wrongful discharge can be defined as the willful termination of an employee by an employer because of the employee's alleged failure to perform in accordance with the expectations of the employer, and the termination is contrary to public policy. Id. In order for this exception to apply, the terminated employee must make a showing that 1) the employee was terminated, 2) the dismissal violated a clear mandate of public policy and 3) that there was a relationship between the defendant and the decision to fire the employee. Leese v. Balt. Cty., 64 Md. App. 442, 468 (1985). Judicially recognized mandates of public policy in Maryland include circumstances where an employee has been terminated for exercising a specific legal right or duty such as filing a workers' compensation claim, missing work due to jury duty or military service, refusing to work in an unsafe environment, and asserting their rights to be paid for overtime work or the right to be paid the state mandated minimum wage. See Sears, Roebuck & Co. v. Wholey, 139 Md. App. 642, 656 (2001). Terminating an employee for refusing to violate the law or engage in illegal activity at the direction of the employer also constitutes a violation of public policy according to Maryland law. Id.

Another exception to the common law rule of at will employment is that employers may not refuse to hire or terminate employees on the basis of discrimination because of an individual's race, color, religion, sex or national origin. 42 U.S.C. § 2000 (2018).

The presumption of the at-will employment relationship may also be overcome by contract. See Towson Univ. v. Conte, 384 Md. 68, 79-80 (2004). A contract between the employer and employee, whether express or implied, may create an employment relationship where the employee may only be terminated for just cause. Id. Furthermore, if an employer enters into a contract with an employee that specifies the length or duration of employment, that employer is presumed to have surrendered the right to terminate the employee at their own discretion without cause. Id.

Breastfeeding

In accordance with Maryland law, a mother may breastfeed her child in any public or private location in which the mother and child are authorized to be. Md. Code Ann., Health-Gen. § 20-801 (West 2018).

Employers in Maryland are also bound by federal law, which states that an employer has to provide a reasonable break time for an employee to express breast milk for her nursing child for the duration of at least one year after the child's birth. 29 U.S.C. § 207 (2018). The employer must also provide an area inside the workplace, other than a restroom, where an employee has the ability to breastfeed her child in private. Id. An employer is not required to compensate an employee for any working time spent while breastfeeding. Id. at § 207(2).

An employer employing less than 50 employees may request an exemption from this statute by showing that these requirements impose undue financial difficulty or hardship in relation to the size and resources of the employer's business. Id. at § 207(3).

Minimum Wage

The state of Maryland sets minimum wage at no less than $11.75 per hour, which remains in effect for the 12-month period beginning January 2021. Md. Code Ann., Lab. & Empl. § 3-413(c) (West 2018). The minimum wage will increase each year from 2021 through January 2025, at which point it will be $15 per hour (effective January 1, 2025).  

At least two localities have different minimum wage requirements than the statewide rate. For more information on the increase of Maryland minimum wage by county, please see: www.dllr.state.md.us/labor/wages/.

Exceptions

In Maryland, a "tipped employee" is defined as an employee who is engaged in an occupation in which that employee regularly receives more than $30 in tips monthly, who has also been informed of the statutory requirements and retains all of the tips they receive. MD Code Ann., Lab. & Empl. § 3-419(a) (West 2018). Employers may deduct a maximum tip credit of $5.12 from a tipped employee's wages and must pay tipped employees an hourly wage of at least $3.63 per hour to exclude tips. Id. Most employees who work more than 40 hours per week must also be paid one and one0-half times their usual hourly rate for every additional hour. Id.

Employees Under the Age of 20

An employer may pay an employee a wage that equals at least 85 percent of the state minimum wage if the employee is under 20 years of age, only for the first six months that the individual is employed. Md Code Ann., Lab. & Empl. § 3-413(d)(1) (West 2018).

Student Workers

A full-time high school or college "student learner" who works part-time may also be paid the greater of a wage of at least 85 percent of the standard minimum wage, or the $7.25 per hour required in accordance with the Federal Fair Labor Standards Act, whichever is greater. 29 U.S.C. § 206 (2018). This is applicable to employees qualified as student learners by participating in a work study program; if the student worker is not working as part of an approved work study program, employers are required to pay the statewide minimum wage rate.

Smoking

In Maryland, smoking is prohibited throughout the entire indoor workplace. Md. Code Ann., Health–Gen. § 24-501 (West 2018); Md. Code Ann., Lab. & Empl. § 5-608 (West 2018). An enclosed workplace can be defined as an indoor place of employment, which may include a vehicle used by an employee in the course of employment that is occupied by more than one employee, an employee lounge, a conference room, a hallway and any enclosed portion of the establishment. Id. This regulation is inapplicable to establishments which engage primarily in the sale of tobacco and tobacco-related accessories, vehicles used in the course of employment occupied by one individual only and smoking necessary to conduct scientific research conducted at an analytical or educational laboratory. Id. An employer is required by Maryland law to ensure that the prohibition of smoking in an enclosed workplace is enforced, as well as to post signs at every entrance to the work site which state that smoking is prohibited. Id.

Child Labor

Maryland law places significant restrictions on the employment of minors. See Md. Code Ann., Lab. & Empl. § 3-202 (2018). Work permits are required for the employment of all minors under the age of 18. Md. Code Ann., Lab. & Empl. § 3-206 (2018). The only exemptions for the employment of minors under this section, are for children of any age who are employed as models, performers or entertainers with special permits issued by the Maryland Department of Labor, Licensing and Regulation. Id.

A minor under the age of 14 is not permitted to work in Maryland and may not be employed. Id at § 3-209. Minors from the ages of 14 to 15 are not permitted to work more than four hours per day or 23 hours per week when school is in session. Md. Code Ann., Lab. & Empl. § 3-211 (2018). The restriction changes to eight hours per day and 40 hours per week when school is not in session. Id. The minor employee may not report to work before 7:00 a.m. or stay afterward any later than 8:00 p.m. Id.

The rules vary for minors between 16 and 17 years of age. Id at § 3-210. These minor employees may not spend more than 12 total hours between work and school each day, and must be allotted a minimum of eight hours of break time from both work and school within a 24-hour period. Id.

Jury Duty

In Maryland, employers must allow employees to take unpaid leave to serve as jurors. An employer may not require an employee to use that employee's annual sick or vacation leave to respond to a jury summons. Md. Code Ann., Cts. & Jud. Proc. § 8-502(a) (West 2018). It is unlawful for an employer to terminate an employee for taking jury duty leave. Md. Code Ann., Cts. & Jud. Proc. § 8-501(a). This law is applicable to both public and private employers. If an employee was summoned and appears for jury service that lasts four or more hours, which includes travel time, an employer may not require that employee to work a shift that begins either on or after 5:00 p.m. on the day of jury duty, or before 3:00 a.m. on the day following jury duty. Id. at § 8-501(b).

Court Attendance Leave

Employers in Maryland must also allow employees to take unpaid leave to appear as witnesses in civil or criminal court proceedings. Md. Code Ann., Cts. & Jud. Proc. § 9-205(a)(1) (West 2018). It is unlawful for an employer to terminate an employee for taking court attendance leave. Id. This law is applicable to both public and private employers. Id.

Drug Testing

Drug testing of job applicants and employees for a job-related reason is lawful in Maryland. Md. Code Ann., Health-Gen. § 17-214 (West 2018). Employers may test for alcohol and controlled, dangerous substances. Id. at § 17-214(a)(2). Employers are generally required to pay the costs associated with testing, unless an employee or applicant requests independent testing; in that event, the employee or applicant would then be required to pay the costs of testing. Id. at § 17-214(e)(2). If an employee or applicant tests positive for alcohol or controlled, dangerous substances, Maryland law imposes a duty on the employer to notify that employee or applicant. Id. at § 17-214(c)(2). The notice must include a copy of the test results, a summary of the company drug and alcohol policy, and if the employer intends to take disciplinary action against the current employee, written notice of the action is also required. Id. An employer must notify an employee or applicant of a positive result of a drug or alcohol screening either within 30 days of the test date, or seven days from the date of the positive result. Id. If an employee or applicant tests positive on a drug or alcohol screening, an employer may terminate the employee, change the conditions of their employment or, if an applicant, refuse the applicant an offer of employment. Id.

Meal Breaks

Generally, Maryland law does not require employers to provide employees with meal or rest breaks. This general rule is subject to exceptions in the cases of retail employees and minors. Md. Code Ann., Lab. & Empl. § 3-710 (West 2018); Md. Code Ann., Lab. & Empl. § 3-210 (West 2018). If a retail employee works a minimum of four hours in a single shift, their employer is required to provide that employee with a 15-minute rest break. Md. Code Ann., Lab. & Empl. § 3-710 (West 2018). During shifts longer than six hours, an employer is required to provide a retail employee with a 30-minute nonworking break where the employee is completely relieved of their duties. Id. at § 3-710(c). Employers are not required to pay their employees during the 30-minute nonworking breaks. Retail employees may elect to waive the 15-minute rest breaks but may not waive the 30-minute nonworking breaks. Id. If a retail employee has worked eight consecutive hours in a single shift, Maryland law imposes an additional 15-minute rest break for every additional four hours the employee works. Id.

Employers are required to provide minor employees with a 30-minute break before five hours of continuous work. Md. Code Ann., Lab. & Empl. § 3-210(a)(1) (West 2018).

Voting Leave

Pursuant to Maryland law, if an employee is a registered voter, an employer is required to allow that employee a minimum of two hours absence from work on an election day in order to vote, as long as the employee does not otherwise have two hours off during the workday. Md. Code. Ann. Elec. Law. § 10-315 (West 2018). An employer is required to pay the employee while taking voting leave. Id. If an employee has elected to take leave to vote, they must provide the employer with proof that they voted or attempted to vote on an official form prescribed by the state board. Id.

Final Wage Payments

Wage Payment at Termination

An employer must pay an employee all wages earned for work that the employee performed prior to termination on the next regularly scheduled pay date. Md. Code Ann., Lab. & Empl. § 3-505 (West 2018). Commission sales representatives must be paid the commissions due to them within 45 days of the date that the payment would have ordinarily been due, had the employee not been terminated. Md. Code Ann., Lab. & Empl. § 3-604 (West 2018). An employee may collect an amount not to exceed three times the unpaid wages, in addition to attorney's fees and other costs if an employer fails to pay required wages. Md. Code Ann., Lab. & Empl. § 3-507(b) (West 2018).

Payment of PTO or Vacation at Termination

Under Maryland law, payment of PTO or vacation time at the time of termination depends on the employer's written policy, and whether this policy was communicated to the employee at the time of hiring. For example, if an employer informs employees in writing at the time of hiring that unused vacation leave will be lost or forfeited upon termination, then an employee will not be able to claim it. On the other hand, where the employer does not have a written policy that limits the compensation for accrued leave to a terminated employee, that employee is entitled to the cash value of whatever unused PTO or vacation time was left, provided it was otherwise usable.

Unclaimed Wages

The State of Maryland applies the presumption that wages unclaimed after three years are abandoned property. Md. Code Ann., Com. Law § 17-308.2 (West 2018). If an employer is holding unpaid wages in excess of $100, written notice must be provided to the employee by first class mail. Id. The written notice must include the statement that the wages will be presumed abandoned unless the employee responds to the notice within 30 days of receipt. Id. at § 17-308.2(2). If the amount of unclaimed wages is valued at less than $100, the employer is not required to provide written notice to the employee. Id.

Parental Leave

In Maryland, public and private employers are required to grant up to six weeks of parental leave to employees for the birth, adoption or foster placement of a child. Md. Code Ann., Lab. & Empl. § 3-1201 (West 2018). Maryland's Parental Leave Act is applicable to eligible employees of an employer who employs 15 to 49 employees per workday of a calendar year. Id. at § 3-1201(c). An employee is eligible for parental leave in Maryland if the employee has been employed by their employer for at least one year and has worked at least 1,250 hours during that one-year period. Id. at § 3-1201(b)(1). An employee is not eligible for parental leave under this Act if the individual is an independent contractor or is employed at a work site at which the employer employs fewer than 15 employees. Id.

An employer can require an employee to provide written notice of intent to take parental leave within 30 days of the date the employee is to take leave. Md. Code Ann., Lab. & Empl. § 3-1203 (West 2018). However, in the case of a premature birth, unexpected adoption or unexpected foster placement, the employee is not required to give prior written notice to their employer. Id. It is unlawful for an employer to terminate or discriminate against an employee for taking parental leave. Md. Code Ann., Lab. & Empl. § 3-1209 (West 2018). Generally, an employee who is eligible for parental leave and returns to work is entitled to be restored to the position they previously held or an equivalent position with equivalent pay and benefits. Md. Code Ann., Lab. & Empl. § 3-1204 (West 2018). The exception to this rule states that the employer may deny restoration of a position to an employee who has taken parental leave, if the employer can demonstrate that restoring the employee to their prior position would cause substantial and grievous economic injury to their operations. Id.

Sick and Safe Leave

The Maryland Healthy Working Families Act requires an employer to allow employees to accrue at least one hour of sick and safe leave for every 30 hours worked, up to a maximum accrual of 40 hours in a year. Md. Code Ann., Lab & Empl. § 3-1302 (West 2018). Employees may take this leave to care for or treat their own mental or physical conditions, to care for a family member with a mental illness or condition, for maternity or paternity leave, and to obtain preventative medical care for themselves or their immediate family members. Id. For employers with 15 or more employees, the employee "sick and safe leave" must be paid; if an employer employs fewer than 15 employees, the employer has discretion to determine whether the leave be paid or unpaid. Id. Additional information regarding the Act may be found here: www.dllr.state.md.us/paidleave/paidleavemodel.shtml.

Maryland employers have an obligation to notify eligible employees that they are entitled to sick and safe leave. Id. The Maryland Division of Labor and Industry has provided a poster and model notice for employers to utilize in order to ensure that they are in compliance with this requirement. The poster and model notice may be found at: www.dllr.state.md.us/oeope/poster.shtml.

Employers have the discretion to award employees the full amount of sick and safe leave at the beginning of the year that they would have accrued during the course of the year instead of awarding it as it accrues. Id. Employers must allow up to 40 hours of accrued, unused sick and safe leave that the employee has accrued the previous year to be carried over into the next year. Id.

Flexible Leave

Under the Maryland Flexible Leave Act (MFLA), an employer that provides paid leave with 15 or more employees must allow an employee to use such earned paid leave to care for an immediate family member (child, spouse or parent) who is ill. The MFLA does not require that an illness be serious in order to qualify for coverage. Additionally, the MFLA does not extend or limit the maximum leave period allowed under the federal Family and Medical Leave Act.

Military Leave

If a member of an eligible employee's immediate family either departs or returns from active duty outside the United States, that employee is entitled to take leave on that day. Md. Code Ann., Lab. & Empl. § 3-803 (West 2018). These provisions apply to public and private employers that employ 50 or more employees and do business in Maryland. Id.

Right to Work

Maryland does not have a statute explicitly requiring union membership in order for an employee to obtain a job or to remain employed. However, it is prohibited by law in Maryland for a prospective or current employer and a prospective or current employee to make any promises which require either party: to join or remain a member of an employer or labor organization; not to join or remain a member of an employer or labor organization; or to withdraw from a labor relation if the party joins or remains a member of an employer or labor organization. Md. Code Ann., Lab. & Empl. § 4-304 (West 2018).

Unemployment Insurance

Unemployment insurance provides benefits to those persons within the State of Maryland who are unemployed through no fault of their own and are able to work. For an individual to be entitled to unemployment insurance benefits in Maryland, that individual must be unemployed through no fault of their own, have sufficient earnings in their base period, filed a claim for benefits with a Department of Labor Licensing and Regulation claim center, and available for and actively seeking work. Eligible individuals are entitled to benefits for as many as 26 weeks. Individuals working less than full-time may be eligible for partial benefits if their regular work hours have been reduced. More information regarding Unemployment Insurance Benefits on Maryland may be found at: www.dllr.state.md.us/oeope/poster.shtml.

Workers' Compensation

In Maryland, all covered employers are required to obtain insurance for employees' on-the-job injuries and diseases that result in total or partial incapacity or death. Md. Code Ann. Lab. & Empl. § 9-201 (West 2018). The Maryland workers' compensation provisions are applicable to all employers, whether private or public that employ one or more employees. Id. For purposes of the Act, there is a general presumption that all employees are covered employees. Md. Code Ann., Lab. & Empl. § 9-202 (West 2018). An employer may overcome the presumption by proving that an employee is an independent contractor. Id. For an on-the-job injury to be compensable, the injury must result from a work-related accident, arise out of the course of employment and arise in the course of employment. Id. Once an employee files a claim with the Maryland Workers' Compensation Commission, the commission may assess medical expenses, disability benefits, wage reimbursement, death and funeral benefits to the injured employee or their family. Id.

Ban-the-Box Laws

Maryland enacted a ban-the-box law effective February 29, 2020, prohibiting employers with 15 or more full time employees from asking job applicants about their criminal history on the initial job application. There are limited exceptions, such as employers who provide direct care to minors or vulnerable adults.

General Contractor Liability for Unpaid Wages Act

Maryland Senate Bill 853 also known as the General Contractor Liability for Unpaid Wages Act, general contractors can be held jointly and severely liable if a subcontractor fails to adequately compensate its employees. Wages withheld in Maryland may be subject to a penalty of up to three times the unpaid wage amount, plus attorneys' fees and costs which may be assessed to the general contractor. The Act also provides for the indemnification of the general contractor for any wages including penalties and fees by the subcontractor.

Pay Transparency

Under the Maryland Equal Pay Act, Maryland prohibits an employer from taking an adverse employment action against an employee who inquiries about, discusses or discloses his or her own wages or the wages of another, if those wages have been disclosed voluntarily. Employees who have regular access to wage information are not protected by the law, unless they obtain the wage information outside of their normal duties. An employer may maintain a written policy, establishing reasonable workday limitations on the time, place and manner for inquiries about or the discussion or disclosure of an employee's wages.

Immigration Verification

Maryland places no additional employment verification procedures on employers beyond federal I-9 compliance. www.uscis.gov/i-9.

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Guide last updated July 2021.

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