Maryland Legislation That May Affect Small Employers

Maryland Legislation That May Affect Small Employers

The Maryland General Assembly is considering and may pass two laws that directly affect small businesses and their relationships with their employees. Two bill sin particular have a pretty good chance of making it to Governor O’Malley’s desk for signature at the end of the General Assembly session, a bill to increase the statewide minimum wage and a bill to required employers to provide sick leave.

The Maryland Minimum Wage Act of 2014 (HB 0295 and SB 0331) was introduced at the request of the Governor as one of the Governor’s legislative priorities for the year. The bill was heard in House Economic Matters Committee yesterday.  The bill will raise the Maryland minimum wage to $10.10 over the next three years. If enacted, the bill would raise the minimum wage to $8.20 per hour beginning July 1, 2014. The minimum wage will increase to $9.15 on July 1, 2015 and increase to $10.10 on July 1, 2016. The minimum wage is then linked to the Consumer Price Index for calculating increases after 2016.

Notably, for restaurants, the tip credit has been reduced from 50% to 30%. This of course will affect not only the servers at restaurants but the patrons as well.

The Maryland Earned Sick and Safe Leave Act (HB 0968 and SB 0753) provides that employers with 10 more employees must provide one paid sick hour for every 30 hours worked. For an full time employee working 2000 hours a year (that is a 40 hour work week and a 50 week work-year), the employee would earn 66.6  hours per year or 8.3 days per year. There is an option for employers to cap the earned sick leave at 56 hours or 7 days. This is paid time off.

Employers with 9 or fewer employees must provide the time off but it is unpaid time off.

The law does not affect employees who work less than 8 hours per week. But while the employee is not eligible for the sick leave, that employee is counted in determining if the employer employs 9 or fewer employees. Thus, an employer who has 3 full time staffers supplemented by 9 workers who each only work 8 hours per week would be counted as employing 10 or more employees and would have to provide paid time off for those three full time workers, but not the 9 part time workers.

Employees would be given the time off to obtain medical care, mental health services, legal services related to domestic abuse or stalking, or other services related to domestic abuse for the employee themselves or their family (pretty broadly defined).

The Sick Leave Act also requires that employers maintain records of time accrued and used. One wrinkle that may cause employers additional recordkeeping is the rehire provisions. If an employee leaves a company, but is rehired within 12 months, any sick leave accrued must be carried over.

If enacted, all employers much start tracking sick leave beginning October 1, 2014.

There are other bills that could be enacted that may affect the labor costs and administrative burdens on small businsses, but the two bills above have more likelihood of enactment.