In Maryland, effective hourly workforce management often centers on overtime and hours‑worked calculations.
State requirements can interact with federal standards, and in some areas, local rules may layer on additional obligations for employers.
Maryland’s wage and hour laws balance statewide consistency with important local variations.
The state’s minimum wage is indexed to inflation, and certain local jurisdictions—such as Montgomery County—have set higher rates for public contracts. Maryland also mandates paid sick leave under the Healthy Working Families Act.
Whether you manage employees directly or through an Employer of Record (EOR) like HireArt, understanding Maryland’s layered compliance requirements is essential for smooth operations.
This blog is based on information available to HireArt as of October, 2025. HireArt does not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and should not be relied on for, tax, legal or accounting advice. Consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.
Maryland’s minimum wage applies statewide but varies based on employer size and location.
As of 2025, the statewide minimum wage is $15.00 per hour and will continue to be indexed annually for inflation. Some local jurisdictions, such as Montgomery County, have separate minimum wage ordinances—especially for public contracts or large employers—that exceed the statewide rate.
Employers must follow the higher applicable rate between state and local law.
Maryland requires employers to provide paid sick leave under the Maryland Healthy Working Families Act.
Employees accrue one hour of sick leave for every 30 hours worked, up to 40 hours per year. Employers with 15 or more employees must provide paid leave; smaller employers may offer unpaid leave under the same accrual rules. Leave can be used for illness, preventive care, or family-related absences.
Before the state’s sick leave law went into effect, several jurisdictions—most notably Montgomery County and Baltimore City—had their own ordinances.
The statewide law now establishes a uniform baseline, though employers should confirm whether any local provisions remain in effect for specific sectors or public contractors. In all cases, the law most generous to the employee prevails.
Maryland does not have a statewide requirement for meal or rest breaks for adult employees.
Employers should follow internal policies, collective bargaining agreements (CBAs), or the federal Fair Labor Standards Act (FLSA) for guidance. Providing regular breaks, while not required, is a recommended best practice for promoting employee wellbeing.
Payment of unused paid time off (PTO) at termination depends on the employer’s written policy or contract.
Maryland law generally upholds the terms of the employer’s policy, except when accrued vacation or PTO qualifies as earned wages. Employers should maintain clear, written documentation of payout rules to ensure consistency and compliance.
Reimbursement requirements in Maryland are guided by employer policy and wage deduction limits.
There is no general statewide statute mandating reimbursement for business-related expenses. However, employers must ensure that deductions for equipment, uniforms, or other items do not reduce wages below the minimum rate.
Maryland requires employers to provide pay statements and issue final wages promptly.
Accurate records and timely payments support compliance and demonstrate transparency in payroll administration.
Maryland applies both federal and state economic-realities tests to determine worker classification.
If an employer directs or controls how, when, or where work is performed, the individual must be classified as an employee (W-2). Misclassification can lead to penalties, back pay liability, and tax enforcement by the Maryland Department of Labor.
HireArt acts as an Employer of Record (EOR) to help companies manage compliance with Maryland’s complex labor laws. Through HireArt, employers can:
By partnering with HireArt, employers can simplify compliance, reduce administrative effort, and maintain consistent, lawful employment practices across Maryland.
