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Workers' compensation is a crucial safety net that protects employees in the event of workplace injuries or illnesses. Understanding the Old Line State's workers' compensation laws is essential for both employers and workers to ensure fair treatment and swift resolution in case of accidents on the job.
Our detailed breakdown of Maryland’s workers’ compensation insurance and its laws will help you navigate and understand policies and rules more easily.
If you’re a business owner in Maryland, it’s crucial to protect yourself, your business and your employees with workers’ compensation insurance.
Workers’ compensation insurance provides financial and medical benefits to employees who suffer job-related injuries or illnesses. It’s designed to provide employees who suffer work-related injuries or illnesses with medical treatment and indemnity benefits.
Without workers’ compensation, the cost of a work-related injured or ill employee’s medical treatment could become the responsibility of the employer and their business.
Maryland requires that all employers with one or more employees provide workers' compensation insurance coverage.
While there are certain exemptions, such as independent contractors and specific agricultural laborers, these exceptions are the minority.
It's essential to determine your status to understand your eligibility for workers' compensation benefits.
Workers' compensation benefits in Maryland may include medical treatment, wage replacement, vocational rehabilitation, and compensation for permanent disabilities. The amount received depends on the severity of the injury and its impact on the employee’s ability to work.
Exemptions from workers’ compensation in Maryland may include, for example:
1. Independent contractors
2. Agricultural employers employing less than three workers
3. Business owners with an annual payroll that is lower than $15,000 per year
Workers' compensation benefits are typically provided in exchange for injured employees waiving their right to sue their employer for negligence in most cases.
This trade-off is a fundamental aspect of the workers' compensation system, ensuring that employees receive timely benefits for workplace injuries while providing employers with some protection from being sued by an employee for the work injury.
Maryland’s workers’ comp insurance provides three types of benefits for work injuries:
These benefits cover:
Several factors influence the cost of workers' compensation insurance in Maryland:
In Maryland, it's crucial to report any work-related injury or illness promptly. Failure to do so can jeopardize the ability to claim workers' compensation benefits.
The Maryland workers’ compensation insurance claims process includes the following steps:
Maryland injured workers pay is based on the following classifications:
Fifty percent (50%) of the difference between the employee’s Average Weekly Wage and their wage-earning capacity thereafter, but not to exceed 50% of the State Average Weekly Wage or $728.
66 ⅔% of the employee’s Average Weekly Wage not to exceed 100% of the State Average Weekly Wage or $1,456.
66 ⅔% of the employee’s Average Weekly Wage not to exceed 100% of the State Average Weekly Wage or $1,456.
For awards for a period of less than 75 weeks for events occurring on or after January 1, 2023 but before January 1, 2024, compensation is to be paid at the rate of thirty-three and one-third per centum of the employee's Average Weekly Wage, not to exceed 16.7% of the State Average Weekly Wage or $235.00. The minor disability category does not apply to certain public safety employees. See LE 9-628(a).
For awards for a period equal to or greater than 75 weeks, but less than 250 weeks, for events occurring on or after January 1, 2023 but before January 1, 2024, the compensation is to be paid at 66 ⅔% of the employee’s Average Weekly Wage not to exceed one-third of the State Average Weekly Wage or $468.00.
66 ⅔% of the employee’s Average Weekly Wage not to exceed 75% of the State Average Weekly Wage or $1,092.
For deaths occurring prior to October 1, 2011, the following formula applies:
If wholly dependent, 66 ⅔% of the employee’s Average Weekly Wage not to exceed 100% of the State Average Weekly Wage.
If partly dependent, 66 ⅔% of the employee’s Average Weekly Wage not to exceed 66 ⅔% of the State Average Weekly Wage.
For deaths occurring on or after October 1, 2011, the following formula applies:
1. 66 ⅔% of the deceased employee’s Average Weekly Wage at the time of the occurrence not to exceed the State Average Weekly Wage.
2. The deceased employee’s income shall be divided by the family income to determine the percent of family income earned by the deceased. The percent of family income earned by the deceased is multiplied by the death benefit (as calculated in paragraph 1) to determine the amount payable, collectively, to all dependents.
In accordance with Section 9-683.3(i) of the Labor and Employment Article, all dependents who are neither a dependent spouse nor a dependent child shall be entitled to no more than a total of $65,000, collectively, as their portion of the total death benefits payable.
Beginning on January 1, 2012, this benefit limit shall be adjusted annually by the same percent applicable to the adjustment of the State Average Weekly Wage.
Generally, employers with one or more employees are legally required to have workers’ compensation coverage. Compliance with these requirements is essential to protect both the employer and employees.
When selecting a workers' compensation insurance provider, consider factors such as the provider's experience in the industry, financial stability, coverage options, claims process, customer service, and cost.
We recommend requesting multiple quotes and comparing the offerings before deciding.
Covering your business and employees with a trusted insurance partner — like EverPeak — brings peace of mind so you can focus on your bottom line.
In Maryland, employers who fail to procure or sustain the appropriate workers' compensation are vulnerable to penalties that can cost employers and their business up to $10,000.
In most cases, employees in Maryland are barred from suing their employers for work-related injuries or illnesses. The workers' compensation system provides an exclusive remedy, meaning that employees typically cannot file a lawsuit against their employers. Instead, they must pursue a workers' compensation claim to receive benefits for their injuries or illnesses.
Generally, independent contractors aren’t covered by workers' compensation insurance in Maryland.
Workers' compensation laws typically apply to employees rather than independent contractors.
However, it's important to note that the classification of a worker as an independent contractor or an employee can be complex, and misclassification can lead to legal disputes. If you’re unsure about your classification, we recommend seeking legal guidance.
Ideally, the incident should be reported immediately or within a few days of the occurrence. Prompt reporting helps ensure the necessary steps are taken to initiate the workers' compensation claims process.
Employees can verify online if their employer has coverage through the state’s online search tool.