Maryland Employee Handbook Requirements (2026)

Maryland's Healthy Working Families Act (Title 3, Subtitle 13 of the Labor and Employment Article) requires employers with 15 or more employees to provide paid sick and safe leave, and employers with fewer than 15 to provide unpaid sick and safe leave. Employees accrue 1 hour for every 30 hours worked, up to 40 hours per year, with carryover of up to 40 hours.

The penalty structure is what makes non-compliance expensive: up to $1,000 per employee for each employee the employer is not in compliance with, plus the full monetary value of the unpaid leave, actual economic damages, and if the employee prevails in court, 3x the value of the unpaid leave, punitive damages, and attorney's fees.

Where employers go wrong:

• Counting employees incorrectly at the 15-person threshold. The paid vs. unpaid distinction hinges on having 15 or more employees. Part-time employees, temporary employees, and employees on leave all count toward this threshold. An employer that counts only full-time employees and comes up with 14 may actually have 18 when all workers are included.
• Restricting usage to illness only. The Act covers "safe" leave as well as sick leave. Employees can use accrued leave for domestic violence, sexual assault, or stalking situations affecting themselves or family members. A policy that limits sick leave to personal illness is non-compliant.
• Not providing the required notice. Employers must post the Maryland Earned Sick and Safe Leave notice (available from the Maryland Department of Labor) in a conspicuous workplace location and provide written notice to employees at hire. Missing either requirement is a separate violation.
• Requiring a doctor's note for short absences. Maryland employers may only require verification for absences exceeding two consecutive scheduled shifts. Demanding documentation for a single sick day violates the Act.

For a 50-person company that hasn't been tracking accrual correctly, the worst case involves $50,000 in per-employee penalties, back-pay for the unpaid leave, and treble damages if employees file suit. The numbers add up quickly.

The fix: Count all employees (including part-time and temporary) against the 15-person threshold. Configure your leave system to accrue at the statutory rate. Expand qualifying reasons to include "safe leave" uses. Post the required notice and include it in your new-hire materials. And don't request medical documentation for absences of two shifts or fewer.

Sources: Maryland Dept. of Labor: Sick and Safe Leave; HWFA FAQs; HWFA Enforcement Guidance.

Montgomery County enacted its own Earned Sick and Safe Leave Law in 2016, before the state passed the Healthy Working Families Act. Because the state law only preempts local laws enacted on or after January 1, 2017, Montgomery County's earlier law survives. Employers with workers in the county must comply with both laws simultaneously, applying whichever provision is more generous to the employee.

Key differences that create compliance headaches:

• Employer size threshold. The state law requires paid leave at 15+ employees. Montgomery County requires paid leave for employers with 5+ employees. The county requires unpaid leave for employers with fewer than 5. A 7-person company in Bethesda must provide paid sick leave under county law even though state law would only require unpaid leave.
• Annual accrual cap. Montgomery County allows accrual of up to 56 hours per year, compared to the state's 40-hour cap. Employers operating in the county must use the higher 56-hour figure.
• Coverage of all employers. The County law applies to any employer with one or more employees working in Montgomery County. There is no exemption for employers based outside the county if work is performed within county limits.
• Enforcement through the County Office of Human Rights. Complaints under the county law are filed separately from state complaints, through the Montgomery County Office of Human Rights. Penalties include fines of up to $500 per violation, plus lost wages, compensatory damages, and attorney's fees.

The practical burden is a dual-tracking requirement. Employers with employees in both Montgomery County and other parts of Maryland may need to maintain two different accrual rates and caps, or simply adopt the more generous Montgomery County standard statewide to simplify administration.

The fix: If you have any employees who work in Montgomery County (including remote workers who reside there), apply the county's 56-hour accrual cap and the 5-employee paid leave threshold. Consider adopting the Montgomery County standard company-wide to avoid dual tracking. File awareness of both the state and county complaint processes.

Sources: Montgomery County OHR: Employer Guidance; People's Law Library: Montgomery County ESSL; Maryland DoL: State Preemption FAQ.

Maryland has been tightening non-compete restrictions on two fronts. First, the existing income-based restriction: non-competes are void and unenforceable for employees earning 150% or less of the state minimum wage, which currently works out to $22.50 per hour or less (based on the $15.00/hr minimum wage).

Second, and more recently, Maryland enacted a broad ban on non-competes for healthcare professionals effective July 1, 2025. For any employee licensed under the Maryland Health Occupations Article who provides direct patient care and earns total annual compensation of $350,000 or less, non-compete and conflict-of-interest provisions are banned entirely. For those earning above $350,000, non-competes are capped at one year and a 10-mile geographic radius from the primary place of employment.

Where employers create risk:

• Using old template agreements. If your standard employment agreement includes a non-compete clause and you haven't updated it since mid-2025, it's likely unenforceable for healthcare workers and low-wage employees. Continuing to present void agreements to new hires creates a bad-faith impression and potential claims.
• Forgetting the veterinary expansion. Maryland also banned non-competes for veterinarians and veterinary technicians, regardless of compensation level. This catches veterinary practice owners who have historically relied on non-competes to protect their patient base.
• Confusing non-competes with other restrictive covenants. The healthcare ban explicitly does not apply to nondisclosure agreements, confidentiality agreements, or non-solicitation agreements. Employers can still protect proprietary client information. But the restriction on direct competitive activity is gone for covered employees.
• Retroactivity misconceptions. The July 2025 law applies only to agreements executed on or after the effective date. Pre-existing non-competes remain enforceable under prior law. But employers cannot renew, extend, or modify old agreements to circumvent the new restrictions.

The fix: Audit all employment agreements for non-compete clauses. Remove or revise non-competes for employees earning $22.50/hr or less. For healthcare and veterinary workers, eliminate non-competes for those earning $350K or less and narrow the scope for higher earners. Shift your protective strategy toward enforceable alternatives like NDAs and non-solicitation agreements.

Sources: Fisher Phillips: Maryland Healthcare Non-Compete Ban; Tydings: Non-Competes in 2025; Lipp Law: Maryland Non-Compete Landscape.

Maryland's Equal Pay for Equal Work Act underwent a significant expansion effective October 1, 2024. The changes hit three areas simultaneously: expanded protected classes, mandatory salary range disclosure, and a pay history inquiry ban.

Protected classes. Maryland now explicitly prohibits pay differences based on sex, gender identity, and sexual orientation for comparable work. The prior law covered sex-based pay differences; the amendment makes the gender identity and sexual orientation protections explicit rather than implied.

Wage transparency. Under SB 525/HB 649, all employers must include a minimum and maximum salary range in every job posting for positions that will be physically performed, at least in part, within Maryland. This applies to both external and internal postings.

Pay history ban. Employers may not request or require salary history from applicants as a condition of employment, and they cannot use salary history information to determine wages unless the applicant voluntarily provides it.

Where the pitfalls are:

• Job postings on national platforms. A LinkedIn posting for a role that could be performed in Maryland must include the salary range, even if the company is headquartered elsewhere. The obligation follows the job location.
• Using "comparable work" defensively. The Act uses "comparable work" rather than "equal work" to define the comparison standard. This means employers can't avoid scrutiny by giving slightly different job titles to employees performing substantially similar work.
• Retaliation for pay discussions. Employees have the right to inquire about, discuss, and disclose their wages. Employers who take adverse action against employees for wage discussions face enforcement by the Maryland Department of Labor, including penalties of up to $500 per employee per violation.

The fix: Add salary ranges to all job postings for Maryland-based roles. Remove salary history questions from applications and interview protocols. Review compensation across comparable roles for gender identity and sexual orientation pay gaps. Document legitimate business reasons for any pay differences in case of audit.

Sources: Ogletree: Maryland Wage Transparency Law; Venable: Maryland 2024 Legislative Session; Fisher Phillips: Maryland Pay Equity.

Maryland's Flexible Leave Act applies to employers with 15 or more employees who provide any form of leave with pay (sick leave, vacation, PTO, comp time). The Act requires that if you provide paid leave, employees must be allowed to use it to care for an ill immediate family member (child, spouse, or parent) and for bereavement upon the death of an immediate family member, under the same terms they could use leave for their own purposes.

This sounds simple, but it creates a stacking effect that many employers don't anticipate:

• Sick leave policies that restrict usage to "employee's own illness." If your policy provides 10 days of paid sick leave but limits it to the employee's personal illness, the Flexible Leave Act overrides that restriction. The employee can use those same 10 days to care for a sick child, spouse, or parent.
• PTO policies with narrow categories. Even if your PTO policy doesn't label any bucket as "sick leave," any paid leave that can be used for the employee's own illness must also be available for family illness and bereavement. The Act looks at function, not labels.
• Bereavement leave as a separate, limited benefit. If your policy provides 3 days of bereavement leave but 10 days of PTO, an employee can use PTO for additional bereavement time under the same conditions they would use PTO for their own needs. The Flexible Leave Act effectively expands bereavement coverage to the full extent of available paid leave.
• Retaliation protections. Employers cannot discharge, demote, suspend, discipline, or threaten employees for exercising their rights under the Act. This includes penalizing employees for using sick days to care for family members, even if it was previously against company policy.

The Flexible Leave Act interacts with the Healthy Working Families Act and (starting July 2026) the Time to Care Act, creating yet another layer of leave obligations that must be coordinated in your handbook.

The fix: Review your leave policy language to ensure paid leave is available for family illness and bereavement, not just employee illness. Remove any restriction that limits sick leave to the employee's own health conditions. Train managers that denying leave for family care purposes when the employee has available paid leave is a violation.

Sources: Labor Law Center: Maryland Flexible Leave Act; Gordon Feinblatt: Maryland's Flexible Leave Law; Maryland DoL: Employment Standards Guide.