Code of Maryland Regulations
Title 09 - MARYLAND DEPARTMENT OF LABOR
Subtitle 12 - DIVISION OF LABOR AND INDUSTRY
Chapter 09.12.41 - Wage and Hour Law
09.12.41.19 - Regular Hourly Rate
09.12.41.19. Regular Hourly Rate
A. "Regular hourly rate" means the usual hourly rate.
B. 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.
C. Any commission or bonus, if:
(1) Paid weekly, is added to the employee's total compensation in order to determine the regular hourly rate;
(2) Paid other than weekly, is allocated to the particular workweek in which it was earned; or
(3) Allocation is not practical, may be apportioned in equal amounts to each workweek during the period in which it was earned.
D. Gratuities and Tips.
(1) 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.
(2) A compulsory monetary charge for service, even if retained by the employee, is not a tip.
(3) A tipped employee's wages must equal at least the minimum wage when direct wages and tips are combined.
(4) 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.
E. The following amounts are not included in determining the regular hourly rate:
(1) 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;
(2) Payments for occasional periods when no work is performed, such as vacation, sick leave, holidays, or jury duty;
(3) Payments for reimbursement purposes, such as travel, equipment, or meal expenses;
(4) Payments made in recognition of services if the payment is:
(a) Within the sole discretion of the employer and not pursuant to any agreement, or
(b) Made pursuant to a bona fide profit-sharing trust, savings, or thrift plan;
(5) Contributions irrevocably made by an employer to a trustee or third person under a bona fide retirement, insurance, or similar employee benefit plan;
(6) Extra compensation paid at a premium rate pursuant to a statutorily valid employer-employee agreement; and
(7) Tips received by the employee in excess of the tip credit.(Regulations .19 adopted effective December 17, 1984 (11:25 Md. R. 2132)
Regulation .19D amended effective 41:1 Md. R. 12, eff. 1/20/2014 ; amended effective 47:8 Md. R. 435, eff. 10/1/2020)