Gov. Larry Hogan ultimately wasn’t able to stop the NFIB-opposed paid sick leave law from going into effect, but his effort to soften the blow is advancing in the waning weeks of the 2018 legislative session.
Under Maryland’s new paid sick leave law, which employers had to begin complying with on Feb. 11, business with 15 or more employees must offer up to five days of paid sick leave and businesses with fewer than 15 employees must offer five unpaid sick days. NFIB/MD fought hard against the one-size-fits-all mandate, educating lawmakers and the public on the projected loss of state jobs and economic output. Although Gov. Hogan vetoed the measure in May 2017, lawmakers returned to session in January and overrode the veto.
However, under Senate Bill 134, the Small Business Relief Tax Credit, businesses with fewer than 25 employees could claim tax credits if they offer paid leave. To be eligible, employees must earn paid sick leave and earn less than $30,000 per year. The tax credit would be $1,000 per employee or the total amount of “qualified employer benefits”—including paid sick leave, transportation fringe benefits, educational assistance, dependent care assistance, and employer contributions to health savings accounts—accrued by employees, whichever is less. SB 134 sets aside $5 million for the credit in tax year 2018, $15 million in 2019, $25 million in 2020, $35 million in 2021, and $40 million in 2022 and beyond, and the credits would be issued on a first-come, first-served basis by the Department of Commerce.
Originally, Hogan had proposed offering the credit to businesses with fewer than 50 employees and more money would be set aside for it ($100 million in 2022), but the bill was amended by the Senate Budget and Taxation Committee before going before the full Senate.
On March 19, the Maryland Senate unanimously approved the bill, and at this writing, it is awaiting action in the House.
