For information purposes only. Employers should consider seeking the assistance of experienced employment law attorneys before implementing policy changes.

Maryland Governor Wes Moore signed into law S.B. 38, which effective October 1, 2024, expands information that employers are required to include in employee pay stubs/statements and related employee notices.

The new law applies to all private-sector employers with at least one employee. The law does not apply to state, county or local governments. An individual considered an employee for Maryland tax law purposes is also considered an employee for purposes of these new requirements.

The Maryland Department of Labor (DOL) states that employers should comply with the requirements as soon as they can do so but interprets the law to apply to pay periods that begin on or after October 1, 2024. (Maryland Department of Labor, A. Effective Date.)

Requirements for pay stubs/statements

Under prior law, Maryland employers were required at the time of hire to provide employees with a notice of (1) the rate of pay of the employee, (2) the regular paydays set by the employer and (3) leave benefits available. For each pay period, employers were required to provide a statement of gross earnings and deductions from those earnings, and at least one pay period in advance, a notice of any change in payday or wage amount.

Effective October 1, 2024, S.B. 38 clarifies that the employee notice of rates of pay, paydays and leave benefits must be in writing. The law also requires that an employer provide at least one pay period advance notice of any decrease in the rate of pay. Employers do not need to provide advance notice to employees of an increase in pay.

Employees must also be provided with a written or online pay statement each payday that includes the following information:

• Employer's name as registered with the State of Maryland (and not the name of the third-party payroll processor), address and telephone number
• Date of payment
• Beginning and ending dates of the pay period
• Number of hours worked during the pay period (unless the employee is exempt from federal and state overtime requirements)
• All rates of pay
• Additional bases and amounts of pay, including bonuses, commissions on sales or other bases and the applicable piece rates of pay and the number of pieces completed at each piece rate for each employee paid at a piece rate
• Gross and net pay earned during the pay period
• Amount and description of each deduction made from pay

The Department provides a pay stub template that employers may use.

Employers are not required to include leave balances on the pay statement. However, the Maryland Healthy Working Families Act does require that employers provide a written statement of an employee's available sick and safe leave balance. The Department suggests that including the employee's leave balance in the pay statement is "best practice."

Here is a link to more information on the Maryland Healthy Working Families Act

In addition, Maryland law requires that employers keep for at least three years a record of the employee's name, address and occupation, rate of pay, the amount the employee is paid and the hours the employee works each day and workweek.

Ernst & Young LLP insights

Maryland employers should review their employee notices and pay stubs to confirm they are complying with the new requirements under S.B. 38.