Pay Stub and Pay Statement - Required Information Frequently Asked Questions - Employment Standards Service (ESS)

A. Effective Date

A.1. When do the new requirements for pay stubs and pay statements go into effect?

The Pay Stub and Pay Statement law, Chapter 305 of the laws of 2024 (SB 38) goes into effect October 1, 2024. View the enacted legislation.

A.2. The effective date of the law is October 1, but what if an employer’s pay period begins before October 1 and ends after October 1? Does an employer have to provide a pay statement for that period?

The Department encourages employers to provide this information as soon as they can do so. But the Department is interpreting the law to apply to pay periods that begin on or after October 1, 2024.

B. Scope

B.1. Does the Pay Stub/Pay Statement law apply to an employer with a single employee?

Yes. The new law applies to all private sector employers (including, for example, household employers) with at least one employee..

B.2. Does the Pay Stub/Pay Statement law apply to public sector employers?

No. The Pay Stub/Pay Statement law does not apply to State, county, or local governments.

B.3. Does the law apply to a single-member LLC where the only employee is the owner of the company?

The law applies to all employees. Where an individual is considered an employee for purposes of other laws, then they would likely be considered an employee for purposes of the pay statement law.

B.4. Do the written notice requirements apply to workers who are subject to a collective bargaining agreement?

Yes. An employer is required to provide employees subject to a collective bargaining agreement with written notice of the requirements set forth in the law.

C. Specific Requirements

C.1. What does the new law require?

Prior to the enactment of the Pay Stub and Pay Statement law, employers were required to provide notice to employees at the time of hire of certain information related to rate of pay, paydays and leave benefits, and for each pay period a statement of the gross earnings of the employee and deductions from those gross earnings.

The new law builds upon both of these requirements:

1. Notice: Under the new law, the notice of rates of pay, paydays, and leave benefits must be in writing.

2. Pay Statements: The new law requires that employers provide employees with a written or online pay statement each payday. The law also prescribes the information that an employer is required to provide on that pay statement.

C.2. What information is required on the written statement or online pay statement?

The written statement or the online pay statement must include the following information:

• Employer’s name (as registered with the State of Maryland), 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
• 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; and the
• Amount and description of each deduction made from pay;

C.3. Is there a pay stub template that employers can use?

Yes, the Commissioner of Labor and Industry has created a pay stub template.

C.4. Are employers required to use the template provided?

No, the use of the template is voluntary. However, use of a properly completed template will satisfy the employer’s obligation to provide the information required by this law.

C.5. Can an employee waive the written notice requirements?

No, the requirements cannot be waived.

C.5. Does an employer have to give a new notice every time the wage rate changes?

Yes. The law requires that an employer provide at least one pay period advance notice of any decrease in rate of wage. The law does not prohibit an employer from increasing a wage without advance notice.

C.6. What if an employee receives different pay rates, or is paid on multiple bases?

All rates of pay or bases of pay must be reported on the pay statement. If an employee receives multiple rates of pay, an employer is required to disclose pay stub or online pay statement of all rates of pay and all hours paid at each rate, including hours worked at straight time and any overtime hours.

C.7. Does the Tip Credit Wage Statement Required by §3-419(d) of the Labor and Employment Article satisfy the Pay Stub and Pay Statement law?

No. The tip credit wage statement requirements include an obligation for restaurant employers to show an employee’s effective hourly rate of pay including cash wages and tips. The Pay Stub and Pay Statement law includes additional requirements that are not required to be part of a tip credit wage statement.

C.8. Can the Tip Credit Wage Statement be included in a pay stub that meets the requirements of the law?

Yes. The elements required to be included in a tip credit wage statement may also be included in a pay stub that is compliant with the Pay Stub and Pay Statement law.

C.9. Does a pay statement need to list the hours worked for salaried (overtime-exempt) employees?

No. The pay stub does not need to include the hours worked for salaried employees who are exempt from overtime under federal and State law.

C.10. Does an employer have to provide leave balances on the pay statement?

The pay stub and pay statement law does not require that an employer 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. Best practice would be to include an employee’s leave balance on the pay statement. Here is a link to more information on the Maryland Healthy Working Families Act

C.11. Does an employer need to generate a pay statement for an employee who is away (on leave for example) for an entire pay period and will not be receiving any wages?

If an employee did not work any hours during the pay period and will not be receiving any wages (as paid time off or otherwise), the law does not require that the employer provide a pay statement under the law. However, for record-keeping purposes, an employer still may wish to do so.

C.12. Should a pay statement, generated by a third-party processing company, include the name of the actual employer or the payroll processing company?

The law requires that employer information is provided on the pay statement, not the payroll processing company.

C.13. What employer name should be on the pay statement in the case of joint employment or where an employee works for a wholly owned subsidiary of another company?

There can be multiple employers for a single employee. Since there are many fact-specific scenarios that can create a joint employer relationship, an employer or putative employer should consult with a legal advisor to ensure that the appropriate employer(s) name appears on the pay statement.

C.14. Is an online link to leave balance sufficient to comply with the law or does the employer have to give an actual hard copy of leave accruals?

An online link complies with the requirements of the pay stub law so long as the employee can access information about their leave balance at any time.

C.15. What is the difference between the notice that must be given at the time of hire and the pay statement?

At the time of hire, an employer must give each employee a written notice advising the employee of their rate of pay, the regular paydays, and any leave benefits. The pay statement must be provided for each pay period and include information about hours worked, pay rates, compensation, and deductions.

C.16. How long should employers keep written notice at time of hire?

The Maryland Wage and Hour law provides that an employer shall keep a record of an employee’s name, address and occupation, employee’s rate of pay, amount that the employee is paid, the hours that the employee works each day and workweek for at least 3 years.

D. Compliance and Additional Information

D.1. What should an employee do if an employer does not provide the required information?

An employee may file a complaint with the Wage and Labor Standards Enforcement unit at workrights@maryland.gov or call the hotline at 410-767-2357 (410-767-2370 for Spanish) (8:00 a.m. - 4:30 p.m.).

D.2. What are the penalties for not complying with this law?

The Commissioner of Labor and Industry may impose an administrative penalty of up to $500 for each employee who is not provided a pay statement, or was not provided a pay statement that complies with this law.

D.3. Who can I contact if I have more questions or would like more information?

Contact the Wage and Labor Standards Enforcement Unit at workrights@maryland.gov or call the hotline at 410-767-2357 (410-767-2370 for Spanish) (8:00 a.m. - 4:30 p.m.).