If your business has employees in the state of Maryland, you’ll need to make sure you adhere to Maryland’s Workers’ Compensation Insurance laws. Workers’ Compensation provides medical and financial benefits for employees who suffer work-related injuries or illnesses or for their survivors in the case of an employee death.

Who needs Workers’ Compensation Insurance in Maryland?

Maryland requires all employers who have at least one employee to obtain Workers’ Compensation Insurance. In Maryland, an “employee” is generally defined as someone who works part-time or full-time for an organization or individual and is not an independent contractor.

The Maryland Workers’ Compensation Act (WCA) defines all of the requirements for Workers’ Comp in Maryland, and the Maryland Workers’ Compensation Commission (MWCC) monitors, enforces, and administers the program. Ensuring your company is in compliance is critical, as there are serious penalties and fines for those who fail to abide by state regulations.

What employees are covered under Workers’ Compensation in Maryland?

Almost all workers are covered under Workers’ Compensation in Maryland. If you provide work or services for an employer, and you are not an independent contractor, you will likely be eligible for Workers’ Compensation Insurance.

The following are categories of employees that are eligible for Workers’ Comp coverage:

• Full-time and part-time employees
• Apprenticeships and internships
• Undocumented workers
• Domestic workers making at least $1,000 per quarter
• Agricultural workers who work for a farm that employs at least 3 full-time employees or has an annual payroll of at least $15,000 for full-time employees
• Minors, even those employed unlawfully

The following are categories of employees that are generally excluded from Workers’ Comp coverage:

• Independent contractors
• Volunteers, except those in service of the state government, emergency services, or civil defense
• Casual or occasional workers
• Licensed real estate agents or brokers whose earnings are mainly from commissions

What Workers’ Compensation benefits do employees receive?

Under Workers’ Compensation in Maryland, employers are required to provide the following benefits to employees who are injured in the course of employment:

Medical Benefits

• Medical expenses, including treatment, hospital and nursing services, medicine, crutches and other apparatus, and prosthetics
• Expenses required to purchase, repair, or replace an artificial eye, limb, tooth or other prosthetic appliance or eyeglasses damaged or destroyed because of an accident

Temporary Total Disability Benefits

• If an injured employee is unable to return to work or is partially disabled but the employer cannot accommodate, he or she is eligible to receive Temporary Total Disability (TTD) benefits while recovering, which provides two-thirds of a worker’s average weekly wage pre-injury.
• The MWCC establishes minimum and maximum benefit amounts, which change yearly. In 2020, the maximum TTD benefit was $1,080 per week. The minimum benefit amount was $50 per week or the injured employee’s average weekly wage if it is less than $50.
• TTD benefits are available until the injured employee is medically cleared to return to work or the employee returns to regular or modified employment.

Temporary Partial Disability Benefits

• An injured employee may be able to return to work while recovering in a partial or limited capacity. If the employee works fewer hours or receives lower wages during this time, he or she may be eligible for Temporary Partial Disability (TPD) benefits. TPD benefits provide 50 percent of the difference between a worker’s pre- and post-injury average weekly wage.
• The MWCC establishes minimum and maximum benefit amounts, which change yearly. For 2020, the maximum TPD benefit was $540 per week, and there is no minimum benefit set.
• TPD benefits are available until the injured employee is medically cleared to return to work or the injured worker’s wages return to a pre-injury level.

Permanent Partial Disability Benefits

• If an injured employee recovers from an injury but has a permanent partial impairment, he or she may be eligible for Permanent Partial Disability (PPD) benefits.
• The amount that is paid out for PPD benefits depends on a number of factors, including an impairment rating given by a physician and whether the impairment is “scheduled” or “unscheduled.”
• The WCA lists specific scheduled impairments, which generally involve partial or total loss of use of the upper and lower extremities, hearing, or vision. The number of payable PPD weeks is determined by multiplying the impairment rating by the number of weeks allowed by the schedule.
• Unscheduled impairments involve body parts that aren’t classified as “scheduled.” The number of payable PPD weeks is determined either by the level of mutilation and disfigurement or the level of impairment for the industrial use of the body as a whole.
• The PPD rate depends on the number of weeks payable and ranges from one-third to two-thirds the employee’s average weekly wage.
• The MWCC establishes minimum and maximum benefit amounts, which change yearly. In 2020, the maximum PPD benefit was $810 per week. The minimum benefit amount was $50 per week or the injured employee’s average weekly wage if it is less than $50.

Permanent Total Disability Benefits

• If an injured employee develops a permanent total disability precluding the possibility of earning any wages, he or she may be eligible for Permanent Total Disability (PTD) benefits.
• PTD benefits provide two-thirds of a worker’s average weekly wage pre-injury, payable as long as the employee remains permanently and totally disabled.
• The MWCC establishes minimum and maximum benefit amounts, which change yearly. In 2020, the maximum PTD benefit was $1,080 per week. The minimum benefit amount was $25 per week or the injured employee’s average weekly wage if it is less than $50.

Vocational Rehabilitation Benefits

• A disabled covered employee is entitled to up to 24 months of vocational rehabilitation, which may include vocational assessments, evaluation, counseling, training, job development, and job placement.

Death Benefits

• Employers are required to pay up to $7,000 to cover funeral expenses.
• A worker’s surviving dependents may be eligible to receive two-thirds of the deceased employee’s average weekly wages, up to the maximum average weekly wage set by the MWCC.
• Death benefits are payable for up to 12 years after the employee’s death.

What are the penalties for breaking Maryland Workers’ Compensation laws?

Failure to adhere to the Workers’ Compensation laws set out by the WCA can result in significant fines and even the closure of your business. In order to avoid any costly penalties, it’s important to consult the WCA or your insurer to ensure you are in compliance. Below are the major ways in which companies can be penalized:

Failure to Purchase Coverage

• Failure to secure adequate Workers’ Compensation Insurance may result in a misdemeanor charge, punishable by a fine of up to $5,000 or imprisonment for up to one year, or both.
• A subsequent administrative fine of up to $10,000 may also be charged.

Unpaid Benefits

• Failure to pay the required TTD benefits within 21 days of a claim being filed may result in a fine of up to 20 percent of the amount claimed by the employee.
• Continued non-compliance within nine days of the 21-day period lapsing may result in an additional fine of up to 40 percent of the amount claimed by the employee.
• Failure to pay a benefit award ordered by the MWCC within 15 days of the order being issued or by the due date on the order (whichever is later) may result in a misdemeanor charge, punishable by a fine of up to $5,000 or imprisonment for up to one year, or both.
• Failure to pay medical benefits within 45 days of the MWCC approving payment of medical expenses may result in a fine of up to 20 percent of the unpaid amount, with a possible additional charge of added interest.

Intentional Misrepresentation

• If an employer knowingly misclassifies an employee in order to obtain or deny any benefits or payments under the WCA, they may be charged with a civil fine of up to $5,000 for the first offense and up to $10,000 for each subsequent misclassification.

Unfiled Reports

• If an employer fails to submit a report on a covered accident to the MWCC within 10 days of being notified of the accident, they may be charged with a misdemeanor, punishable by a fine of up to $500.
• If an employer fails to submit the required vocational rehabilitation reports for injured employees receiving vocational rehabilitation benefits, they may be charged with a fine of up to $500 for each violation.

How much does Workers’ Compensation Insurance cost in Maryland?

According to the National Academy of Social Insurance Workers’ Compensation Report (October 2019), the average employer cost for Workers’ Compensation in Maryland was $0.98 per $100 of covered wages. This figure is estimated across all insurers and all industries, so the cost to your particular business may vary.

How does the Workers’ Compensation claims process work in Maryland?

The claims process in Maryland begins with the employee. If an employee suffers a work-related injury or illness, he or she must report the condition to the employer within 10 days for an injury, within 30 days for a hernia, and within one year for an occupational disease.

The employer must submit an injury report to the MWCC within 10 days after first having knowledge of a covered injury or death. For occupational diseases, the employer must notify the MWCC promptly.

The employee must then submit a claim to the MWCC for compensation. For injuries, the claim must be filed within 60 days of the injury. For occupational diseases, the claim must be filed within two years of being unable to work or within two years of knowing that the disease caused his or her inability to work. For an employee death, the employee’s dependents must file a claim within 18 months of the death.

Maryland Workers’ Compensation Insurance Resources

For more information on Maryland Workers’ Compensation laws and requirements, please visit the following resources:

• Maryland Workers’ Compensation Commission (MWCC)