Blog post by Andrew Griffin
Andrew Griffin is the vice president of government affairs at the Maryland Chamber and leads advocacy efforts on behalf of the 5,500+ members of the Chamber before the Maryland General Assembly and on a federal level. He develops, leads and executes the legislative strategy of the organization and maintains the Chamber’s positive working relationships with key elected officials and members of the administration to build a better understanding of and appreciation for business issues.
Congratulations, you’ve started a business in Maryland! Now what?
After your business has been established, there are several 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 impact your business and your employees.
An annual change to employment-related law in Maryland is the required minimum rate of pay for hourly employees (with some exceptions). For most of Maryland, the minimum wage increased to $11.75 per hour as of January 01, 2021 ($11.60 for those with 14 or fewer employees). In Montgomery County, large employers of 50 or more employees are now required to pay $15 per hour as of July 01, 2021, for mid-sized employers that rate is $14 per hour, and smaller employers $13.50 per hour.
One Maryland law that every employer, both new and established, needs to be aware of is 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 law has placed numerous costly, complicated, and cumbersome record-keeping requirements on employers and has left more questions than solutions. Should you have questions on how this may impact you and how best to comply (you are not alone!) the Maryland Department of Labor is ready and willing to assist you.
As noted above, relative to the mandatory sick and safe leave law, while employers of less than 15 employees are not required to offer paid leave, they are required to offer unpaid leave and still maintain all the required record-keeping. One benefit for those employers is a tax credit passed in 2018 to those under-15 employee businesses that choose to provide paid sick and safe leave. Under this law, which has been in effect since July 1, 2018, those employers who provide a paid sick and safe leave program to employees earning at most 250 percent above federal poverty guidelines, are eligible to receive a refundable tax credit of $500 per eligible employee. Unfortunately, the total available tax credit amount is capped at $5 million.
Hopefully, this has provided information that can help get you on your way to a long and prosperous experience as a Maryland business owner and employer. 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!