Employer of Record for Maryland

Guide to Hiring Employees in Maryland

Your guide to hiring employees in Maryland, covering employment and labor laws, payroll, benefits, onboarding and taxes. You can also manage and pay your contractors in Maryland through Playroll.

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Capital City

Annapolis

Timezone

EST

(

UTC-5

)

Paid Leave

Sick Leave & Voting leave

Income Tax

2% - 5.75%

Employer Tax

23.6% plus workers compensation

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How to Hire Employees In Maryland

Hiring in Maryland for the first time can be challenging, especially with the state's complex employment laws. Whether you're hiring independent contractors, setting up a legal entity, partnering with a PEO, or using an Employer of Record (EOR), it's essential to understand the local employment landscape. Playroll's comprehensive guide is here to help, whether you're onboarding local talent or relocating team members.

Here are four primary ways companies can hire employees in Maryland:

  • Establishing a local entity: Creating a legal entity in Maryland allows for direct hiring, but it can be costly and time-consuming. However, it gives you full control over employment and reduces risk exposure.
  • Partnering with an Employer of Record (EOR): An EOR, like Playroll, takes on the legal responsibilities of employment, acting as the employer on your behalf. This option streamlines hiring, payroll, and compliance with Maryland’s labor laws, helping you hire in Maryland without navigating the complex legal landscape yourself.
  • Working with a Professional Employer Organization (PEO): A PEO, such as Playroll, co-employs your team, managing essential HR functions like payroll, benefits, and compliance. Partnering with a PEO ensures you meet Maryland’s labor regulations while offering competitive employee benefits.
  • Hiring independent contractors: Hiring independent contractors can be more cost-effective, but Maryland has strict contractor classification rules. Proper classification is essential to avoid penalties for misclassification when hiring in Maryland.

Complying with Maryland specific employment regulations and federal laws is critical to avoiding legal risks and costly fines. Our guide focuses on hiring in Maryland, employment compliance, and how Playroll’s services can support your business as you navigate the complexities of hiring in the state.

Good To Know

Maryland has a skilled, well-educated workforce, ideal for remote roles in technology, healthcare, and research.

The Eastern time zone supports efficient collaboration with teams across the U.S. and internationally.

Maryland’s proximity to Washington, D.C., gives access to top talent while avoiding the high costs of major urban centers.

Key Things to Know About Hiring in Maryland

Do I need an EIN or Payroll Tax Number to Employ in Maryland?

Yes, if you want to employ workers in Maryland, you will need both a federal Employer Identification Number (EIN) and a Maryland-specific employer payroll tax account.

Working Hours in Maryland

Most employers follow the federal standard of a 40-hour work week, typically structured as 8 hours p/d over five days.

What is considered full-time employment in Maryland?

There’s no official state definition of full-time employment in Maryland, so employers typically define it based on company policy or industry standards. Generally, full-time status is considered to be working between 30 and 40 hours per week.

Probation Period in Maryland

In Maryland, there is no state-mandated requirement for a probationary period for new employees. However, many employers choose to implement probationary periods as part of their onboarding process. These periods typically range from 30 to 90 days.

Labour Laws in Maryland

Minimum wage in Maryland

Maryland's state minimum wage is $15.00 per hour for all employers, regardless of size. 

Maryland Anti-Discrimination Laws

Maryland has robust anti-discrimination laws, enforced by the Maryland Commission on Civil Rights (MCCR) and aligned with federal protections, to prevent workplace discrimination. These laws prohibit discrimination based on race, color, religion, sex, age, national origin, marital status, sexual orientation, gender identity, disability, genetic information, and family responsibilities.

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Onboarding New Hires in Maryland

We can help you get your new employee started in Maryland fast, with a minimum onboarding time from just 1-2 working days. Note that the timeline is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Playroll platform.

For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.

Please note that payroll cut-off dates can impact the actual first day of employment. Playroll’s payroll cut-off date is the 10th of the month, unless otherwise specified.

Payroll Taxes For Maryland

In Maryland, the payroll cycle is not strictly defined by state law, so employers have flexibility in setting payroll schedules. Employers must pay consistently. Most employers use a semi-monthly or weekly pay structure.

Looking to grow your team in Maryland?

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Maryland Employment Taxes

Employer Tax Contributions

Employment Tax TypeTax Rate
Social SecurityAs per federal legislation
MedicareAs per federal legislation
Unemployment Tax ActAs per federal legislation
State Unemployment Insurance0.023
Workers compensationvaries

Employee Payroll Tax Contributions

Employee Payroll Tax ContributionTax Rate
Social SecurityAs per federal legislation
MedicareAs per federal legislation

Tax Due Dates in Maryland

Unemployment Insurance:

  • Employers remit Maryland state unemployment insurance taxes quarterly to the Maryland Department of Labor.

Federal Income and FICA Taxes (Social Security and Medicare):

  • Employers are required to deposit federal income tax, Social Security, and Medicare contributions to the IRS either on a semi-weekly or monthly basis, depending on their total tax liability.

Individual income tax:

  • 1st Quarter: April 15
  • 2nd Quarter: June 15
  • 3rd Quarter: September 15
  • 4th Quarter: January 15 of the following year

If these dates fall on a weekend or holiday, the deadline is extended to the next business day.

Pension in Maryland

Maryland’s pension regulations provide retirement benefits to public employees, including state and local government workers, teachers, and law enforcement officers. Private-sector employers in Maryland are not required to offer pension plans, but if they do, they must comply with federal standards under the Employee Retirement Income Security Act (ERISA).

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The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Maryland tailored to your needs.

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Paid and Unpaid Leave Policies in Maryland

Is vacation leave mandatory in Maryland?

No, Maryland does not require employers to provide paid or unpaid vacation leave. Vacation leave policies are typically set by individual employers and outlined in company handbooks or employment contracts.

What are Mandatory Leave Entitlements in Maryland?

Type of LeaveTime PeriodMandatoryPay StatusEligibility Criteria
Sick Leave1 hour of leave for every 30 hours workedYesPaid/UnpaidEmployers with 15 or more employees must provide paid sick and safe leave; those with fewer than 15 employees must provide unpaid leave.
Jury DutyDuration of an employee's dutyYesUnpaidThis obligation applies to all employees, including full-time, part-time, temporary, and casual workers, provided they have been employed for at least three months prior to the summon
Voting leave2 hoursYesPaidEmployees may be required to show their employer proof that they voted.
Family Military leave1 dayYesUnpaidAn employer with a minimum of 50 employees must provide a covered day off if a close family member returns from or leaves for active military service outside the country.
Federal Family and Medical Leave12 weeksYesUnpaidPer federal stipulations.
Maryland Parental Leave6 weeksYesUnpaidEmployees are eligible if they have worked for the employer for at least 12 months and have worked 1,250 hours during the prior 12 months.

Paid Time Off in Maryland

In Maryland, the only mandated paid time off is for voting leave, where proof of voting is required, and for sick leave. Employers with 15 or more employees must provide paid sick and safe leave.

Maternity Leave In Maryland

  • Federal Family and Medical leave provides unpaid leave for employees who have given birth, adopted or are fostering a child. To be eligible, an employee must work for an employer with at least 50 employees.
  • Maryland Parental leave is for employers with between 15-49 employees. This leave provides employees with 6 weeks unpaid leave for employees who have given birth, adopted or are fostering a child.

Paternity Leave In Maryland

  • Under the Federal Family and Medical leave Act male employees who are fathers to newborns, adopted or fostered kids are eligible for unpaid leave if they work for an employer who has more than 50 employees.
  • Under Maryland Parental leave males employees who are father to newborns, adopted or fostered kids are eligible to 6 weeks unpaid leave if they work for an employer who has between 15-49 employees.

Sick Leave In Maryland

  • In Maryland, sick leave is covered under the Maryland Healthy Working Families Act (HWFA), which requires employers to provide sick and safe leave for qualifying employees.
  • Employees who work at least 12 weeks are eligible.
  •  Employers with more than 15 employees must provide paid sick leave to their employees, while employees with less than 15 employees provide unpaid sick leave.
  • The leave is accrued at 1 hour of leave for every 30 hours worked.

Military Leave in Maryland

In Maryland, military leave provisions are primarily governed by federal law, particularly the Uniformed Services Employment and Reemployment Rights Act (USERRA). Maryland law requires employers to provide unpaid leave to employees who are members of the military of the U.S. Armed Forces for military training or active duty. The Maryland Deployment Leave Law also grants unpaid leave for employees with family members who are leaving for or returning from active duty outside the U.S.

Jury Duty in Maryland

Employers must allow employees to sit for jury duty when they are called to. The leave is unpaid and the length of time depends on the matter in court. 

Parental Leave In Maryland

In Maryland, parental leave is covered by both federal and state laws, with benefits depending on employer size and employee eligibility. Under federal law, employers with more than 50 employees must provide unpaid leave for parental care, eligibility and length of the leave are by federal regulations (check out our federal hiring guide for more information!) Maryland state law requires employers with 15 to 49 employees to offer up to 6 weeks of unpaid leave for the birth, adoption, or foster placement of a child, with similar eligibility criteria.

It’s Easy To Manage Benefits For Employees In Maryland With Playroll

Benefit Requirements for Employers in Maryland

Are employers required to provide health insurance in Maryland?

As per the federal Affordable Care Act (ACA), employers with 50 or more full-time employees nationwide are required to provide health insurance that meets minimum essential coverage standards. There is no state-specific legislation to mandate health benefits where there are less than 50 full-time employees.

Do part-time employees get benefits in Maryland?

In Maryland, whether part-time employees receive benefits depends on the type of benefit and the employer's policies, as there is no state mandate requiring all benefits for part-time workers:

  • part-time employees are eligible for paid (or unpaid, for smaller employers) sick and safe leave.
  • Maryland requires employers to provide workers' compensation coverage for all employees, including part-time staff.
  • Part-time employees in Maryland may qualify for unemployment benefits assuming they meet eligibility requirements based on their earnings and work history.

Are employers required to offer 401k in Maryland?

In Maryland, employers are not required to offer a 401(k) retirement plan, but many choose to provide it as a benefit to attract and retain employees. If an employer offers a 401(k), they must comply with federal regulations under the Employee Retirement Income Security Act (ERISA), which includes fiduciary responsibilities, providing plan information to participants, and meeting specific funding standards.

Employment Termination Protocols in Maryland

Termination Process in Maryland

Maryland is an at-will employment state, allowing either the employer or employee to end the employment relationship at any time, with or without cause or notice, unless restricted by law, a contract, or a collective bargaining agreement. Termination based on protected characteristics, such as race, color, national origin, sex, religion, disability, age, marital status, sexual orientation, gender identity, or genetic information, is prohibited under federal and state anti-discrimination laws. Additionally, employees cannot be terminated for engaging in protected activities, like filing a discrimination complaint, reporting safety violations, or whistleblowing.

Notice Period in Maryland

There is no requirement for a notice period before terminating an employment relationship, unless specified in an employment contract or company policy. 

Severance in Maryland

Maryland law does not require employers to provide severance pay unless stipulated in an employment contract or company policy. However, Employers must pay all wages due for work performed before termination on or before the next regular payday. This includes any earned wages, commissions, and, depending on company policy, accrued vacation time.

Hiring Employees in Maryland with an employer of record

Discuss how an EOR handles onboarding, including setting up compliant employment contracts, registering for taxes, and managing benefits like Maryland's superannuation system (if applicable).

The employer of record is responsible for:

  • Employment Compliance: Ensure all employment contracts comply with Maryland's labor laws and regulations, including proper classification of employees.
  • Payroll Management: Calculate, process, and distribute employee salaries in accordance with Maryland's payroll laws, including deductions for taxes and social security contributions.
  • Tax Filing and Contributions: Handle the registration, filing, and payment of employer taxes and social security contributions to the relevant authorities.
  • Employment Contracts: Draft and maintain compliant employment agreements, detailing salary, benefits, working hours, and termination terms in line with Maryland's legal requirements.
  • Benefits Administration: Provide mandatory employee benefits as required by [State]'s labor laws, such as health insurance, pension contributions, and statutory leave.

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FAQS

FAQs About Hiring In Maryland

What is the minimum wage in Maryland?

As of January 1, 2024, Maryland’s minimum wage rates are:

  • $15.00 per hour for large employers (15+ employees).
  • $14.00 per hour for small employers (14 or fewer employees).
  • Applies across all sectors.

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