Blog post by Larry Richardson
Larry Richardson is the vice president of government affairs at the Maryland Chamber of Commerce. He is an attorney who brings over 25 years of lobbying experience to the Chamber where he advocates on behalf of the Maryland business community to grow jobs and reduce regulations.
Congratulations, you’ve started a business in Maryland! Now what?
After your business has been established, there are a number of labor and employment laws to consider when it comes to your employees. Since you’re a startup, you’ll most likely have fewer employees than most. The size of your business will determine which laws you more closely align with when it comes to your employees.
Among the most recent changes to employment-related law in Maryland has been the required minimum rate of pay for hourly employees (with some exceptions). For most of Maryland, the minimum wage increased to $10.10 per hour as of July 01, 2018. In Montgomery County, employers of 50 or less employees are now required to pay $12 per hour as of that date and, if they employ more than 50 employees, that rate is $12.25 per hour.
An additional change to Maryland law that every employer, both new and established, needs to be aware of is one that mandated a mandatory sick and safe leave. This mandate, which became law on February 11, 2018, after the legislature overrode the governor’s 2017 veto of the bill (passed as HB 1, 2017 Maryland General Assembly Session), requires businesses with 15 or more qualifying employees to provide up to five days of paid sick and safe leave. For employers of less than 15, you must still provide the leave, but it can be unpaid. While well-intentioned, this new law has placed a number of costly, complicated and cumbersome record-keeping requirements on employers and has left more questions than solutions. We are hoping to go back to the General Assembly in 2019 with some suggestions to help lessen the confusion and the corresponding burdens of this law. Should you have questions on how this may impact you and how best to comply (trust me, you are not alone!) the Maryland Department of Labor, Licensing and Regulation is ready and willing to assist you.
As I noted above, relative to the mandatory sick and safe leave law, while employers of less than 15 employees are not required to offer a paid leave, they are required to offer an unpaid leave and still maintain all the required record-keeping. The one benefit for those employers, however, is that in this past session what the governor introduced, and the General Assembly passed (albeit a very watered-down version of what the governor introduced), will allow for a tax credit to those under-15 employee businesses that provide a paid sick and safe leave. Under this legislation, which went in to effect July 1st of this year, those employers who provide a paid sick and safe leave to employees who earn at most 250 percent federal poverty guidelines, which equates to $30,350 annually, are eligible to receive a refundable tax credit of $500 per eligible employee. Unfortunately, the total available tax credit amount capped at $5 million. We are hoping to increase that and gain some additional upward modifications in the 2019 session.
Hopefully, this has provided a bit of information that can help get you on your way to a long and prosperous experience as a Maryland business owner and employer. Just remember this is just a “snapshot” of what to check in to, and what to expect, as you head down the road to being the next business mogul.
Remember, it is very important that you consult with those that can advise you—your accountant, your tax expert and your attorney.
And don’t forget, once you get up and running, come help us continue the work to make Maryland better for everyone by making it better for business. Join the Maryland Chamber of Commerce!