Budgeting for Employment Law Changes

As we get close to the end of the 2023 third quarter, many businesses and organizations start thinking about next year’s budget. You may not feel ready to think about 2024, but there are several employment laws that will affect you. It is important to plan now so you can ensure compliance later. Here are some important deadlines to remember:

  1. Minimum Wage.  Effective January 1, 2024, the minimum wage in Maryland will be $15/hour for all Maryland employers, regardless of size. Montgomery County’s minimum wage already increased on July 1, 2023, to (i) $16.71 per hour for employers with 51 or more employees (large employers); (ii) $15.00 per hour for employers with 11 to 50 employees (mid-sized employers); and (iii) $14.50 per hour for employers with 10 or fewer employees (small employers).  Beginning on January 1, 2024, these small employers in Montgomery County will need to meet the Maryland state threshold of $15/hour. 
  2. Non-Compete Salary Threshold.  As we have written about before, prohibiting employees from competing with their employer is becoming more and more restricted.  In Maryland, non-compete provisions are prohibited for any employees who make less than $15 per hour or $31,200 annually.  Beginning October 1, 2023, the threshold changes to 150% of the State minimum wage rate. This means that from October 1, 2023, to December 31, 2023, the threshold will be $19.88 per hour or approximately $41,350 annually.  On January 1, 2024, the threshold will be $22.50 per hour or approximately $46,800 annually. If you require new hires or current hires to sign a non-compete agreement after these dates, you must ensure that their salary is above these thresholds. Any agreements that do not comply are void under Maryland law.
  3. Paid Medical Leave.  Maryland’s Family Medical Leave Insurance Program, also known as the Time to Care Act, will provide employees with up to 12 weeks of paid leave from the state for FMLA-type reasons.  By January 1, 2024, the Maryland Department of Labor should issue regulations about the implementation of the program.  On October 1, 2024, employers will begin to make contributions to the program. The program is funded by equal contributions between the employer and the employee with a cap of 1.2% for the employer of an employee’s wages.  Then employees can start to request benefits on January 1, 2026.  As with any new program, this will continue to evolve. It is important to budget in the employer’s contribution starting in 2024, as well as, plan to update your family leave policies once the new regulations are available.

As you think ahead, we’re here to help you comply with the new employment laws effectively and practically so you can focus on what gives you joy.

Natasha M. Nazareth, Esq.
Ginny Cascio Bonifacino, Esq.