Maryland PTO Laws: What Employers Must Know (2026)

Maryland has one rule that separates it from almost every other state, and it turns on a piece of paper.

In most states, whether earned vacation must be paid out at termination is settled by statute — it either is wages or it is not, and your policy cannot change the answer. Maryland makes the answer depend on your policy, provided the policy existed and was communicated before the question arose.

Get that right and you have flexibility other states do not offer. Get it wrong — or never write it down — and the default applies, which is that the money is owed.

This is general information rather than legal advice — confirm current requirements with the Maryland Department of Labor or an employment attorney before finalizing a policy.

Sick and safe leave

Accrual is one hour per 30 hours worked, up to 40 hours per year.

Whether it is paid depends on size. Employers with 15 or more employees must provide it paid. Employers with 14 or fewer must provide the same accrual unpaid, and job-protected. The obligation does not disappear below the threshold; only the pay does.

Use begins on the 106th calendar day. Not 90, not 120. This oddly specific number is the single most common error in Maryland policies, because it does not match anything a template from another state would say.

Caps. Accrual may be capped at 40 hours per year and 64 hours in total, and use may be capped at 64 hours per year.

Carryover is permitted up to 40 hours, or you may front-load the full entitlement and avoid carryover entirely.

Covered reasons include the employee's own illness or preventive care, care for a family member, maternity or paternity leave, and safe leave relating to domestic violence, sexual assault or stalking.

The written-policy rule for vacation

This is the part worth reading twice.

Under the Maryland Wage Payment and Collection Law, accrued vacation is generally payable at termination. Unless the employer has a written policy that limits or denies payout, and that policy was communicated to the employee at the time of hiring.

Three conditions, all of which must hold:

1. The policy is written.
2. It clearly limits or denies payout.
3. It was communicated at hire — not introduced later, after the vacation was earned.

Fail any one and the default applies. In practice, the most common failure is the third: a company introduces a forfeiture clause in year three and applies it to balances earned in years one and two.

This is genuinely different from Colorado or Massachusetts, where no amount of drafting permits forfeiture, and from Texas, where nothing is owed unless you promised it. Maryland sits between the two, and the paperwork is what decides which side you land on.

Montgomery County

Montgomery County maintains its own Earned Sick and Safe Leave law, and it is more generous than the state floor in two ways: it applies to all employers regardless of size, and it requires up to 56 hours for employers with five or more employees.

Where the county rule is more generous, it governs. For employers with staff on both sides of the county line, the practical answer is usually to apply the county standard across the board rather than maintaining two policies — the administrative cost of the split typically exceeds the extra 16 hours.

This is the same shape of problem as Illinois with Chicago and Minnesota with Minneapolis, and the opposite of New Jersey, which preempted every local ordinance in favour of one uniform rule.

Combined bank or separate buckets

A single PTO bank can satisfy the sick and safe leave requirement if it meets the accrual rate, covered reasons, carryover and the documentation limits.

The Maryland-specific wrinkle is the payout rule. Sick and safe leave does not require payout at separation. Vacation does, unless your written policy says otherwise. Merge them into one bank and you have to decide what your written policy says about the whole balance — including the portion that would have carried no payout obligation on its own.

The PTO cost calculator will show what that decision is worth in real money, which is usually what settles it.

A Maryland handbook audit

1. Does it use 106 days for the sick leave use gate?
2. Does it state the right paid/unpaid position for your headcount?
3. Is there a written vacation payout policy, and was it given at hire?
4. Was any forfeiture clause introduced after people were hired? If so, it does not reach time already earned.
5. Does it account for Montgomery County staff?
6. Does it limit documentation requests appropriately?

How to write a PTO policy covers the drafting, and the PTO policy generator will produce a draft.

Tracking

Maryland asks you to hold two things accurately at once: an hours-based accrual that moves with timesheets, and a payout position that depends on a document written at hire.

The second is a records problem more than a calculation one. If you rely on a written forfeiture policy, you need to be able to show that each employee received it when they started — which is an onboarding artefact, not a spreadsheet column.

For the arithmetic, the sick leave accrual calculator converts hours worked into earned time, and sick leave requirements by state summarises the floor. For the payout figure itself, calculating PTO payout at termination covers getting the final-rate calculation right.