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<chapter num="41" heading="Wage and Hour Law" title_num="09" subtitle_num="12">
  <regulation prefix="Regulation" num=".01" heading="Administrative Capacity.">
    <text>“Administrative capacity” has the meaning stated in 29 CFR §541.200 et seq.</text>
  </regulation>
  <regulation prefix="Regulation" num=".02" heading="Agriculture.">
    <text>“Agriculture” means work performed by a farmer or on a farm as an incident to or in conjunction with farming operations, such as:</text>
    <paragraph num="A.">
      <text>The cultivation and tillage of soil, including grading, rock removal, building terraces, irrigation, and fertilization;</text>
    </paragraph>
    <paragraph num="B.">
      <text>The production, growing, cultivation, or harvesting of agricultural or horticultural products or commodities;</text>
    </paragraph>
    <paragraph num="C.">
      <text>Breeding, fattening, feeding, or the general care of livestock, bees, fur-bearing animals whose fur has marketable value, or poultry, including poultry hatchery operations;</text>
    </paragraph>
    <paragraph num="D.">
      <text>Dairying, including:</text>
      <paragraph num="(1)">
        <text>Caring for and milking of milk-giving animals,</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Containing, cooling, and storage of milk when done on the farm, and</text>
      </paragraph>
      <paragraph num="(3)">
        <text>Farm-based manufacturing operations directly and closely related to dairying, such as separating cream or making butter;</text>
      </paragraph>
    </paragraph>
    <paragraph num="E.">
      <text>Farming activities on experimental farms or nurseries, or in greenhouses or mushroom cellars; or</text>
    </paragraph>
    <paragraph num="F.">
      <text>Duties directly and closely related to farming operations, including the:</text>
      <paragraph num="(1)">
        <text>Preparation of products or commodities for market, or</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Delivery of products or commodities to storage, market, or carriers for transportation to market.</text>
      </paragraph>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".03" heading="Complaints.">
    <text>Before the Commissioner of Labor and Industry initiates an investigation, the Commissioner may require the employee to submit a written complaint.</text>
  </regulation>
  <regulation prefix="Regulation" num=".04" heading="Directly and Closely Related.">
    <text>“Directly and closely related” has the meaning stated in 29 CFR §541.703 et seq.</text>
  </regulation>
  <regulation prefix="Regulation" num=".05" heading="Executive Capacity.">
    <text>“Executive capacity” has the meaning stated in 29 CFR §541.100 et seq.</text>
  </regulation>
  <regulation prefix="Regulation" num=".06" heading="First Processing.">
    <paragraph num="A.">
      <text>“First processing” means the procedure by which the form of a product or commodity is changed from its original state.</text>
    </paragraph>
    <paragraph num="B.">
      <text>“First processing” does not refer to an employer who acts as a wholesaler, broker, factor, or other middleman in the chain from producer to consumer.</text>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".07" heading="Food and Drink Establishment.">
    <paragraph num="A.">
      <text>“Annual gross income”:</text>
      <paragraph num="(1)">
        <text>Means the total of all receipts from all sales made during the preceding four calendar quarters; and</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Is the sole basis for determining the annual gross income for all subsequent quarters.</text>
      </paragraph>
    </paragraph>
    <paragraph num="B.">
      <text>“Cafe” means a combination of a restaurant and a tavern.</text>
    </paragraph>
    <paragraph num="C.">
      <text>“Drive-in” means an establishment:</text>
      <paragraph num="(1)">
        <text>Which sells prepared food items for consumption on the premises or in the purchaser's car;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Which is characterized by a parking lot adjacent to the establishment; and</text>
      </paragraph>
      <paragraph num="(3)">
        <text>To which purchasers generally drive to consummate a purchase.</text>
      </paragraph>
    </paragraph>
    <paragraph num="D.">
      <text>“Restaurant” means an establishment which:</text>
      <paragraph num="(1)">
        <text>Is primarily engaged in selling and serving prepared food and beverages for consumption on the premises;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Provides characteristic employee services and dining facilities; and</text>
      </paragraph>
      <paragraph num="(3)">
        <text>Contains physical and functional equipment and facilities required for the consumption of a meal.</text>
      </paragraph>
    </paragraph>
    <paragraph num="E.">
      <text>“Similar establishment” means an establishment which has the characteristics of a restaurant, drive-in, tavern, or cafe.</text>
    </paragraph>
    <paragraph num="F.">
      <text>“Tavern” means an establishment whose primary sales consist of alcoholic beverages for consumption on the premises on a drink-by-drink basis.</text>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".08" heading="Gasoline Service Station.">
    <paragraph num="A.">
      <text>“Gasoline service station” means an establishment primarily engaged in selling gasoline and lubricating oils to the general public.</text>
    </paragraph>
    <paragraph num="B.">
      <text>A gasoline service station may be part of a larger enterprise which also repairs automobiles.</text>
    </paragraph>
    <paragraph num="C.">
      <text>An establishment which derives the greater part of its net income from the sale of goods other than gasoline, lubricating oils, and related services is not a gasoline service station.</text>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".09" heading="Hotel or Motel.">
    <paragraph num="A.">
      <text>“Hotel” or “motel” for purposes of Labor and Employment Article, §3-415, Annotated Code of Maryland, means an establishment engaged primarily in providing lodging or lodging and meals to the general public.</text>
    </paragraph>
    <paragraph num="B.">
      <text>“Hotel” or “motel” includes an apartment or residential establishment that derives more than half of its annual gross income from providing transient guests with lodging or lodging and meals.</text>
    </paragraph>
    <paragraph num="C.">
      <text>“Hotel” or “motel” does not mean an establishment whose income is derived primarily from providing bedroom and kitchen facilities for leased periods of longer than 3 months.</text>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".10" heading="Hours of Work.">
    <paragraph num="A.">
      <text>“Hours of work” means the time during a workweek that an individual employed by an employer is required by the employer to be on the employer's premises, on duty, or at a prescribed workplace.</text>
    </paragraph>
    <paragraph num="B.">
      <text>Meal periods are included in computing hours of work if the individual is required to perform any duties during the meal period.</text>
    </paragraph>
    <paragraph num="C.">
      <text>Travel time is included in computing hours of work if the individual:</text>
      <paragraph num="(1)">
        <text>Travels during regular work hours;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Travels from one worksite to another; or</text>
      </paragraph>
      <paragraph num="(3)">
        <text>Is called out after work hours in emergency situations.</text>
      </paragraph>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".11" heading="Immediate Family.">
    <paragraph num="A.">
      <text>“Immediate family” means an employer's parent, spouse, child, brother, sister, grandchild, or grandparent who:</text>
      <paragraph num="(1)">
        <text>Resides with the employer; and</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Enjoys the same privileges as other members of the family.</text>
      </paragraph>
    </paragraph>
    <paragraph num="B.">
      <text>“Immediate family” does not include anyone living outside the employer's household, except the employer's parent, spouse, or child.</text>
    </paragraph>
    <paragraph num="C.">
      <text>“Child” means a natural child, adopted child, or stepchild but does not mean the spouse of that child.</text>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".12" heading="Mechanic.">
    <paragraph num="A.">
      <text>“Mechanic” means an employee whose primary function is to put automobiles, trailers, trucks, or farm machinery in working order by making necessary repairs or adjustments.</text>
    </paragraph>
    <paragraph num="B.">
      <text>The following employees are not mechanics:</text>
      <paragraph num="(1)">
        <text>An employee whose primary duty is to wash, clean, polish, lubricate packing wheel bearings, change oil or oil filters, change tires, paint, perform carpentry, dispatch, or install or repair seat covers;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>An employee whose primary duty is to record a vehicle's condition or to write a report detailing necessary parts and mechanical work.</text>
      </paragraph>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".13" heading="Outside Salesman.">
    <text>“Outside salesman” has the meaning stated in 29 CFR §541.500 et seq.</text>
  </regulation>
  <regulation prefix="Regulation" num=".14" heading="Overtime Compensation.">
    <paragraph num="A.">
      <text>An employee subject to the Minimum Wage Act of Maryland shall be paid overtime compensation for each hour worked in excess of 40 hours per workweek. This includes the following:</text>
      <paragraph num="(1)">
        <text>All hours worked by an employee for an employer are included, even though the employee may perform work in two or more unrelated jobs;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>If the total workweek hours do not exceed 40, an employee is not entitled to overtime compensation for hours worked in excess of 8 on any day, including Saturday, Sunday, and holidays.</text>
      </paragraph>
    </paragraph>
    <paragraph num="B.">
      <text>Compensation for hours worked in excess of 40 hours per workweek is computed at 1-1/2 times the regular hourly rate at which the employee is employed. This includes the following:</text>
      <paragraph num="(1)">
        <text>The regular hourly rate may not be less than the statutory minimum;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>If the employee's regular hourly rate is higher than the statutory minimum, overtime compensation is computed at 1-1/2 times the higher rate.</text>
      </paragraph>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".15" heading="Packing.">
    <text>“Packing” means the physical operation by which a product or commodity is placed in a container which is then closed and sealed.</text>
  </regulation>
  <regulation prefix="Regulation" num=".16" heading="Partsman.">
    <paragraph num="A.">
      <text>“Partsman” means an employee whose primary function is to:</text>
      <paragraph num="(1)">
        <text>Sell or dispense parts for automobiles, trailers, trucks, or farm machinery; or</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Requisition, stock, or dispense those parts for an establishment's mechanical service department.</text>
      </paragraph>
    </paragraph>
    <paragraph num="B.">
      <text>A partsman's duties may include incidental clerical or cleaning work necessary to keep stockrooms, bins, and shelves in order.</text>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".17" heading="Professional Capacity.">
    <text>“Professional capacity” has the meaning stated in 29 CFR §541.300 et seq.</text>
  </regulation>
  <regulation prefix="Regulation" num=".18" heading="Reasonable Cost.">
    <paragraph num="A.">
      <text>The reasonable cost of board, lodging, or other facilities may be included as part of an employee's wage if the:</text>
      <paragraph num="(1)">
        <text>Facilities are customarily and regularly available to all similarly situated employees;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Employee's acceptance of the facility is voluntary and uncoerced; and</text>
      </paragraph>
      <paragraph num="(3)">
        <text>Employee receives the benefits of the facility for which he or she is charged.</text>
      </paragraph>
    </paragraph>
    <paragraph num="B.">
      <text>The reasonable cost of board, lodging, or other facilities included as part of the wage paid to an employee may not:</text>
      <paragraph num="(1)">
        <text>Exceed the actual cost to the employer; and</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Include profit to the employer or to any person or establishment affiliated with the employer.</text>
      </paragraph>
    </paragraph>
    <paragraph num="C.">
      <text>The reasonable cost of furnishing board, lodging, or other facilities may include the cost of operation and maintenance.</text>
    </paragraph>
    <paragraph num="D.">
      <text>The employer shall demonstrate the actual cost of the board, lodging, or facilities furnished.</text>
    </paragraph>
    <paragraph num="E.">
      <text>In a food and drink establishment, if the actual cost of food consumed by an employee cannot be determined, the reasonable cost is half the price customarily and regularly charged a member of the general public.</text>
    </paragraph>
    <paragraph num="F.">
      <text>The cost of furnishing board, lodging, or other facilities primarily for the benefit or convenience of the employer may not be included as part of an employee's wage.</text>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".19" heading="Regular Hourly Rate.">
    <paragraph num="A.">
      <text>“Regular hourly rate” means the usual hourly rate.</text>
    </paragraph>
    <paragraph num="B.">
      <text>The regular hourly rate is determined by dividing the total compensation for employment in any workweek by the total number of hours worked in that workweek.</text>
    </paragraph>
    <paragraph num="C.">
      <text>Any commission or bonus, if:</text>
      <paragraph num="(1)">
        <text>Paid weekly, is added to the employee's total compensation in order to determine the regular hourly rate;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Paid other than weekly, is allocated to the particular workweek in which it was earned; or</text>
      </paragraph>
      <paragraph num="(3)">
        <text>Allocation is not practical, may be apportioned in equal amounts to each workweek during the period in which it was earned.</text>
      </paragraph>
    </paragraph>
    <paragraph num="D.">
      <text>Gratuities and Tips.</text>
      <paragraph num="(1)">
        <text>Compensation derived from tips in accordance with Labor and Employment Article, §3-419, Annotated Code of Maryland, is allocated to the particular workweek in which the employee is a tipped employee.</text>
      </paragraph>
      <paragraph num="(2)">
        <text>A compulsory monetary charge for service, even if retained by the employee, is not a tip.</text>
      </paragraph>
      <paragraph num="(3)">
        <text>A tipped employee’s wages must equal at least the minimum wage when direct wages and tips are combined.</text>
      </paragraph>
      <paragraph num="(4)">
        <text>A tipped employee who spends more than 20 percent of the employee’s work time performing non-tip producing duties directly related to their tipped occupation shall be paid by the employer at least the minimum wage for that time.</text>
      </paragraph>
    </paragraph>
    <paragraph num="E.">
      <text>The following amounts are not included in determining the regular hourly rate:</text>
      <paragraph num="(1)">
        <text>Sums paid as a gift or reward for service, the amounts of which are not measured by or dependent on hours worked, production, or efficiency;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Payments for occasional periods when no work is performed, such as vacation, sick leave, holidays, or jury duty;</text>
      </paragraph>
      <paragraph num="(3)">
        <text>Payments for reimbursement purposes, such as travel, equipment, or meal expenses;</text>
      </paragraph>
      <paragraph num="(4)">
        <text>Payments made in recognition of services if the payment is:</text>
        <paragraph num="(a)">
          <text>Within the sole discretion of the employer and not pursuant to any agreement, or</text>
        </paragraph>
        <paragraph num="(b)">
          <text>Made pursuant to a bona fide profit-sharing trust, savings, or thrift plan;</text>
        </paragraph>
      </paragraph>
      <paragraph num="(5)">
        <text>Contributions irrevocably made by an employer to a trustee or third person under a bona fide retirement, insurance, or similar employee benefit plan;</text>
      </paragraph>
      <paragraph num="(6)">
        <text>Extra compensation paid at a premium rate pursuant to a statutorily valid employer-employee agreement; and</text>
      </paragraph>
      <paragraph num="(7)">
        <text>Tips received by the employee in excess of the tip credit.</text>
      </paragraph>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".20" heading="Restaurant Tip Credit Wage Statement.">
    <paragraph num="A.">
      <text>Definitions.</text>
      <paragraph num="(1)">
        <text>In this regulation, the following terms have the meanings indicated.</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Terms Defined.</text>
        <paragraph num="(a)">
          <text>“Reported tips” means tips retained by the employee and disclosed to the employer, tips distributed to the employee by the employer, or tips obtained through a valid tip pooling arrangement or tip sharing arrangement.</text>
        </paragraph>
        <paragraph num="(b)">
          <text>“Restaurant” has the meaning stated in Regulation .07D of this chapter.</text>
        </paragraph>
        <paragraph num="(c)">
          <text>“Tip credit wage statement” means a written or electronic statement that shows the employee’s effective hourly rate of pay, including employer paid cash wages plus all reported tips, for all tip credit hours worked for each workweek in the pay period.</text>
        </paragraph>
      </paragraph>
    </paragraph>
    <paragraph num="B.">
      <text>No later than 2 weeks following the end of the pay period, a restaurant employer shall provide each employee for whom the employer utilizes a tip credit with a tip credit wage statement for each pay period that reflects all reported tips for tip credit hours for each workweek of the pay period.</text>
    </paragraph>
    <paragraph num="C.">
      <text>A restaurant employer may satisfy the requirement in §B of this regulation by providing an online system through which an employee may obtain the employee’s tip credit wage statement.</text>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".21" heading="Salesman.">
    <paragraph num="A.">
      <text>“Salesman” for purposes of Labor and Employment Article, §3-415, Annotated Code of Maryland, means an employee whose primary duty is to sell or obtain orders or contracts for the sale of automobiles, trailers, trucks, or farm machinery.</text>
    </paragraph>
    <paragraph num="B.">
      <text>The sales work may be performed in the establishment or elsewhere.</text>
    </paragraph>
    <paragraph num="C.">
      <text>A salesman may perform work incidental to and in conjunction with the employee's regular sales or solicitations, including incidental deliveries and collections.</text>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".22" heading="Work-Study Programs.">
    <paragraph num="A.">
      <text>Definitions.</text>
      <paragraph num="(1)">
        <text>A “work-study program” is a program in which the period of normal public or private school attendance is divided between school attendance and employment in industry or business.</text>
      </paragraph>
      <paragraph num="(2)">
        <text>A “work-study coordinator” is the individual assigned to supervise or administer a work-study program.</text>
      </paragraph>
    </paragraph>
    <paragraph num="B.">
      <text>Application.</text>
      <paragraph num="(1)">
        <text>Upon application by a work-study coordinator, the Commissioner may authorize payment to a student of an hourly rate less than the statutory minimum.</text>
      </paragraph>
      <paragraph num="(2)">
        <text>The application shall state the:</text>
        <paragraph num="(a)">
          <text>Title of the work-study coordinator;</text>
        </paragraph>
        <paragraph num="(b)">
          <text>Name and address of the school attended by the student;</text>
        </paragraph>
        <paragraph num="(c)">
          <text>Name and address of the student;</text>
        </paragraph>
        <paragraph num="(d)">
          <text>Name and address of the employer;</text>
        </paragraph>
        <paragraph num="(e)">
          <text>Type of work to be performed by the student;</text>
        </paragraph>
        <paragraph num="(f)">
          <text>Hourly rate to be paid; and</text>
        </paragraph>
        <paragraph num="(g)">
          <text>Duration of time that the student will be paid less than the statutory minimum.</text>
        </paragraph>
      </paragraph>
      <paragraph num="(3)">
        <text>The employer and the work-study coordinator shall sign the application.</text>
      </paragraph>
    </paragraph>
    <paragraph num="C.">
      <text>The work-study coordinator shall:</text>
      <paragraph num="(1)">
        <text>Obtain, through his or her efforts, all work-study program employment opportunities;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Supervise, on a continuing basis, the progress of each student in a work-study program; and</text>
      </paragraph>
      <paragraph num="(3)">
        <text>Notify the Commissioner upon termination of a student's employment in the job designated on the application.</text>
      </paragraph>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".23" heading="Workweek.">
    <text>“Workweek” means a fixed and regularly recurring period of 168 consecutive hours beginning on any hour of the day.</text>
  </regulation>
  <regulation prefix="Regulation" num=".24" heading="Computer-Related Occupations: Exemptions from Minimum Wage and Overtime Compensation.">
    <text>A computer systems analyst, computer programmer, software engineer, or other similarly skilled professional employee in the computer field is eligible for classification as an employee in a professional capacity if the employee meets the standard set forth in 29 CFR §541.400 et seq.</text>
  </regulation>
  <annotations>
    <annotation type="Authority">Labor and Employment Article, §§2-106(c), 3-410, and 3-419, Annotated Code of Maryland</annotation>
    <annotation type="History" subtype="Administrative History">Effective date: August 14, 1974 (1:1 Md. R. 70)</annotation>
    <annotation type="History" subtype="Administrative History">Regulations .01—.16 repealed and new regulations .01—.22 adopted effective December 17, 1984 (11:25 Md. R. 2132)</annotation>
    <annotation type="History" subtype="Administrative History">Regulation .01 repealed and new Regulation .01 adopted effective February 13, 2006 (33:3 Md. R. 240)</annotation>
    <annotation type="History" subtype="Administrative History">Regulation .04 repealed and new Regulation .04 adopted effective February 13, 2006 (33:3 Md. R. 240)</annotation>
    <annotation type="History" subtype="Administrative History">Regulation .05 repealed and new Regulation .05 adopted effective February 13, 2006 (33:3 Md. R. 240)</annotation>
    <annotation type="History" subtype="Administrative History">Regulation .13 repealed and new Regulation .13 adopted effective February 13, 2006 (33:3 Md. R. 240)</annotation>
    <annotation type="History" subtype="Administrative History">Regulation .17 repealed and new Regulation .17 adopted effective February 13, 2006 (33:3 Md. R. 240)</annotation>
    <annotation type="History" subtype="Administrative History">Regulation .19D amended effective January 20, 2014 (41:1 Md. R. 12)</annotation>
    <annotation type="History" subtype="Administrative History">Regulation .23 adopted effective June 8, 1992 (19:11 Md. R. 1015)</annotation>
    <annotation type="History" subtype="Administrative History">Regulation .23 repealed and new Regulation .23 adopted effective February 13, 2006 (33:3 Md. R. 240)</annotation>
    <annotation type="History" subtype="Administrative History">Chapter revised effective October 1, 2020 (47:8 Md. R. 435)</annotation>
  </annotations>
</chapter>