What Are Maryland’s Overtime Laws?
Maryland overtime laws generally follow the federal Fair Labor Standards Act, or FLSA. The FLSA establishes various rights that employers, as well as employees, must abide by. These laws set rules for which employees qualify for overtime benefits and exactly how much overtime pay they should receive. They also delineate employee rights afforded to them against any unlawful retaliation. These rights are important because they protect against risk of termination, discrimination, and other adverse employment actions.
Most Maryland employees who fall under the state and federal statutes do not work as many hours as those in other states. While employees across the nation average over 40 hours of work per week, Maryland employees tend to work about 36 to 37 hours each week. Maryland employees in agriculture and non-profit work average even less.
Under federal law , an employer is required to pay a non-exempt employee time-and-a-half for any hours worked over 40. Maryland state law requires non-exempt employees to be paid time-and-a-half for all hours worked in excess of 40 hours in a workweek. Employers can still require or invite employees to work more than 40 hours per week, but they are required to compensate the employees for the additional hours per overtime laws. Under the FLSA, overtime pay applies only to hours actually worked. Employers do not have to pay overtime for hours that the employee is entitled to take off, like vacation, sick days, holidays, or personal time. Employees are also not entitled to overtime pay for time spent traveling to and from work.
Who Qualifies for Overtime in Maryland?
From the Maryland Department of Labor:
Most employees must be paid overtime when they work more than forty hours in a workweek. Overtime is due at the rate of one and one-half times your regular rate of pay for each hour over forty in the workweek. Certain occupations or types of employment are specifically exempt from overtime. Commissioned: Salespeople who receive most of their compensation on a commission basis and work for a retail or service establishment with at least eight employees: Employers do not have to pay overtime to salespeople who are employed by a retail or service establishment which has an annual dollar volume of sales made or business done of less than $500,000; and the regular rate of pay of any employee is one and one-half times the minimum wage as defined in the FLSA. Outside; Salesperson Paid Solely on Commission: Employees who are employed in work that includes both inside and outside work: Employers do not have to pay overtime to employees who work in and out of an establishment, but their work must be sales and distribution of the employer’s own products. The salespersons must get paid solely on commission, and the establishment must have less than a fixed percentage of nonexempt sales employees. The fixed percentages are: (1) at any time during the year, the percentage of weekly earnings paid in commissions does not reach 50 percent, or (2) at any time during the year, the percentage of total earnings paid in commissions does not reach 25 percent. Salaried professionals; and, Learners or apprentices: Employers do not have to pay overtime to employees engaged in bona-fide executive, administrative, or professional duties. Also, employers do not have to pay overtime to learners or apprentices under certain conditions. For example, an employee must be paid at least 60% of the minimum wage and the rate may not be reduced while the employee is engaged in learning or apprenticeship.
Maryland Overtime Pay Calculator
In Maryland, employers must pay non-exempt employees a minimum of 1.5 times their regular rate of pay for all hours worked in excess of 40 in a workweek. For example, if you earned $20 per hour, you would be entitled to $30 per hour for each hour of overtime worked. Although most employees are not exempt from overtime, several categories are exempt under the law. Employees who are considered exempt are not entitled to be paid overtime for hours worked over 40 in a week. For example, under the federal Fair Labor Standards Act (FLSA), most "white collar" workers are considered exempt from overtime; this includes most executive, administrative, and professional employees, as well as many sales employees. Certain occupations are not exempt, such as firefighters, emergency medical technicians, police officers, and field and track workers. In addition, certain categories of employees are not covered by either federal or Maryland law and therefore are not entitled to receive overtime pay. These categories include taxi drivers, actors and performers, casual babysitters and babysitters who reside in the home, employees of movie and theater theaters, carnival or amusement ride operators, golf caddies, maids and housemen, seasonal workers, and employees of establishments defined as an "establishment where performances are given on irregular days" by Maryland’s Wage Payment and Collection Law. To calculate your weekly overtime pay, employers must track employee hours, including the regular and overtime hours worked. Many employers use time clocks, where employees "punch in" or record their time into a smartphone app. Records generated by time clocks or apps, however, may not accurately reflect hours worked according to the DOL. If the employer has control over the time-keeping operations, it is likely to be held responsible for any violations of the FLSA.
If there is a conflict between the employer’s time records and the employee’s time records, the employee’s submitted time records will be the best evidence of the hours worked — that is, unless the employer can show it is completely inaccurate.
Common Exceptions and Exemptions
Maryland recognizes a number of exemptions where overtime laws do not apply. The Federal Fair Labor Standards Act (FLSA) also have exemptions, including exemptions for professional, outside sales, automobile salespeople, and retail salespeople. However, Maryland has its own requirements for these exemptions. Therefore, it is important to look at both Maryland and Federal law. In addition, there are a number of Maryland specific exemptions to overtime which are not covered by the FLSA. They are as follows: In addition to attaining a certain length of service, there are exemptions for certified school nurses, certified nursing assistants, attendants, home ward aides, environmental service workers, and maids who hold other jobs. Moreover, although the federal government does not require an employer to pay a pupil services employee overtime, Maryland does.
Employee Protections and Employer Obligations
Many employers, whether they be for profit, non-profit, or governmental, seem to be under the misguided belief that they are automatically entitled to pay their employees a straight salary. They are not.
In Maryland, federal law mandates overtime pay for any employees covered by the Fair Labor Standards Act. Unlike the FLSA, however, Maryland’s laws apply to employees that are not covered by the FLSA (non-FLSA employees) and are among the few states that comport with the standards set by the FLSA for both overtime and minimum wage standards.
Typically, an employee that works over 40 hours in the week should receive overtime pay (time and a half) unless exempt from overtime pay under the FLSA or Maryland law. Some common exempt employee classifications include administrative, executive, professional, and an independent contractor. Determining whether a position qualifies for an exemption can be complicated, and if an employee believes that misclassification has occurred he or she may file a complaint with the Maryland Department of Labor, Licensing and Regulation .
Employers are also required to keep accurate records of time worked by employees and must maintain them for at least three years. Time sheets, which have the start and end times of a work period, must be accurate and free from hand-written changes.
The employer is also responsible for calculating pay and providing all employees with a timely and accurate wage statement that complies with federal and state requirements. Paying an employee a salary does not mean that the employee is exempt from receiving overtime pay, nor does it mean the employer is paying the correct amount of overtime due an employee.
While the FLSA does provide a mechanism for recovering money damages for unpaid overtime (i.e. unpaid overtime minus the amount of overtime already paid to the employee), the Maryland Wage Payment and Collection Law (MWPCL) also provides adequate measures to recover unpaid overtime pay.
Filing a Complaint If You Are Denied Overtime
If an employee believes that they have been wrongfully denied overtime pay, it is important to know the appropriate steps to take to rectify the situation. In Maryland, there are several avenues to consider, depending on the nature of the employment relationship and the employer’s location.
For employees in Maryland and Washington, D.C., the Fair Labor Standards Act (FLSA) may provide a course of action in the event that an overtime dispute arises. Under the federal law, exempt and non-exempt workers alike are able to proceed with filing claims to recover overtime wages based on the amount of pay legitimately owed to them. In the event that the employee is employed by an employer located in Maryland, they may qualify for overtime pay under both the state and federal laws.
For employees based solely in Maryland, however, an employee must still file a claim with the Maryland Department of Labor, Licensing, and Regulation (DLLR). Under Maryland overtime laws, employees are covered by the Maryland Wage and Hour Law, which generally allows for greater protections for employees than under the FLSA. The Maryland state agency charged with handling overtime claims is the Maryland Division of Labor and Industry. An employee who believes that they have been wrongfully denied overtime pay under the Maryland state overtime law may file a complaint with the Maryland DLI. In this complaint, the affected employee must describe the details of the alleged failure to provide overtime wages, and how he or she has been financially harmed. Once filed, the Maryland DLI will forward the information to the employer’s Human Resources or other designated representative for their response. The agency may also ask the employee for additional documentation in support of their claim, including records that reflect the hours worked.
Recent Revisions of Maryland Overtime Laws
A series of recent changes have altered the landscape of Maryland overtime law. Although the current laws may not appear to place particular restrictions on whether the employee or employer must keep time records, the recent changes put forth by the legislature are very significant.
Contrary to California, Maryland has not passed a law requiring all employers to keep accurate time records, simple albeit they are. If non-exempt employees are not required to keep and maintain accurate and adequate time records under federal law, employers are to assume that time records are unnecessary, unless employers know or should know that they are working. The presumption is that if the employer does not know or should not know that an employee is working (a presumption applied where the employer reasonably believes that the worker is not working), the employer does not have an obligation to keep time records for an employee or compensate an employee for the work performed.
The laws passed in Maryland require employers to supplement the federal standard and record the time worked by hourly employees whether or not the employee is entitled to overtime or is actually subject to the overtime laws. The new regulation defines "time worked" as "all time during which an employee is subject to the control of an employer and all time during which an employee is suffered or permitted to work, including all time an employee is required to be at work, on duty, or at a prescribed work place."
The broad definitions of time worked would seem to require employers to keep time records for exempt employees . While employers are not required to keep time records for exempt employees under the federal standard, it is unclear whether this will be the case under the Maryland standard. It is clear that time records for exempt employees should be kept to prove that they are exempt. The new laws, however, do appear to require time records for exempt employees as well.
To strike a balance between the new recordkeeping requirements and the burdens imposed on employers, employers may use time records similar to those required under federal law (an employer’s own system of timekeeping is okay). Employers are not required to create new records or maintain electronically stored records and handwritten time records are acceptable sans addition of handwritten notes with hours. Generally, employers are to provide a daily record of the number of hours worked (including starting and quitting time) and provide that record to the employee upon request. When an employer is unable to provide the record in writing he or she must attest to the reason why in writing on the employee’s paycheck statement.
As time records are not presently required by any law, employers who have not been keeping time records should review existing practices and make necessary changes. Not only will failure to do so leave the employer vulnerable to a lawsuit for no good reason, but there is an additional significant risk that results from not keeping time records. Unless time records are kept, an employer cannot establish an employee’s regular rate of pay. This means that the employer cannot establish the overtime rate of pay even if the employee might be exempt.