Maryland Household Employer Checklist
We’ve got you covered on the payroll end. Please read carefully the following resources and information to help keep you in compliance with MD labor laws. Especially pay attention to Step 1- Workers’ Compensation.
Key Resources:
Employment Guide for Domestic Workers (Montgomery County Residents)
Compensation Disclosure Form (required)
Workers’ compensation insurance coverage for employees is required of every employer in Maryland once you pay $1,000 in wages/quarter. This is an insurance requirement, not a tax, and covers on-the-job injuries. You may already be covered through your homeowners’ or renters’ policy, but please call your insurance company to check. This coverage may be obtained from a private carrier, the Injured Worker's Insurance Fund (IWIF) or by becoming self-insured. Contact the IWIF, 8722 Loch Raven Boulevard, Towson, Maryland 21204-6285. (410) 494-2000 or 1-800-492-0197.
Federal law requires that all employers request this form to be completed by the prospective employee. Don’t submit it to anyone, just keep it with your employer records in case of an audit.
I-9 form: https://www.uscis.gov/i-9
W-4 form: https://www.irs.gov/pub/irs-pdf/fw4.pdf
To be sure your employee doesn’t get an unexpected tax bill, or have too much withheld, have them complete a W-4 form when they are hired, or anytime they experience a change in their withholding requirements (marriage, birth of child, additional income, etc.). You can update your employee’s profile in the Nest Payroll app at anytime during the year.
MD law requires all employers to provide certain notices to their employees:
Work agreement: required in Montgomery County
Compensation Notice Form: Required by all
Having an agreement reduces awkwardness and misunderstandings, especially as things come up you just didn’t anticipate. If you don’t have an agreement with your employee, you can download this one and modify for your situation. This one is for a nanny, but you can easily change out the role of the employee, such as for a housekeeper or caregiver, making it work for you. If you live in Montgomery County, a contract is required. Reference the Employment Guide for Domestic Workers if you live in Montgomery County.
Additionally, Hand In Hand is a great resource for tackling all sorts of challenges that come with household employment, creating a more dignified and respectful workplace for all. Please take advantage of their excellent and free sample contracts and guide books.
Please also make sure you give your employee the new Compensation Notice form, now required by all MD employers.
PAID SICK TIME: NOT REQUIRED
While paid sick time is not required, you may want to offer it. For example, you could offer 3 days/year, or match what you get at your work. You can add the agreed upon hours in your employee’s profile. When taken, simply enter the sick hours in the Nest Payroll app when creating a paycheck for the applicable week.
VACATION TIME or PAID TIME OFF: NOT REQUIRED
Paid vacation time is not required, but it could be an important benefit to offer. If you do, you must follow certain guidelines. For example, Maryland considers accrued vacation to be a form of wages that has already been earned by the employee. Unless you stated otherwise in a written policy at the time of hire, accrued vacation must be paid out to an employee upon termination or separation from the employer. Vacation/PTO hours can be entered in the Nest Payroll app when creating a paycheck.
Details: State of MD - Labor Law - Vacation
MINIMUM WAGE: REQUIRED BY LAW
All household employees are classified as hourly (non-exempt) and are subject to minimum wage protections. To check what the current MD minimum wage rate is, and if your city has a higher minimum wage requirement, check the following resources:
The Economic Policy Institute - Minimum Wage Tracker
Maryland Minimum Wage and Overtime Law
OVERTIME: REQUIRED BY LAW
Overtime of at least 1.5x the hourly rate for any hours worked over 40 regular hours in a 7-day workweek. Overtime compensation is not required for hours worked in excess of eight hours in a day, during weekends, or on holidays. Live-in employees are not excluded from Maryland’s overtime laws.
Details: Sate of MD - Dept of Labor
If your employee leaves, gets fired, or you lay your employee off, please see:
Maryland Termination Pay Requirements
Maryland New Hire Reports
Comptroller of Maryland: Quarterly reporting/filing and tax payments - MW506-Quarterly withholding return
Annual Reconciliation to Comptroller of Maryland: MW-508-Annual Withholding Reconciliation and W-2s
Maryland Dept of Labor: Quarterly reporting/filing and tax payments
IRS quarterly estimated tax payments (IRS schedule is: April/June/September/January)
W-2s for all your household employees
Schedule H, signature ready, that you include with your personal 1040 taxes in April
The information provided on this page is general in nature. This is not to be taken as tax, legal, benefits, financial, or HR advice. Since rules and regulations change over time and can vary by location, consult an attorney or financial advisor for your specific situation.