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New Hire Paperwork and Compliance for Maryland

This guide will outline the onboarding journey in Maryland to help you remain compliant throughout the entire hiring and onboarding process.

September 29th, 2023

Getting new hires up to speed is a time-consuming task that can get challenging quickly if you don’t remain compliant. But with the hectic nature of new hire paperwork, Maryland HR professionals often get lost in the process.

Individuals hiring and onboarding in Maryland will benefit from a guide that makes the paperwork and compliance process as simple as possible. This guide will outline the onboarding journey in Maryland to help you equip new hires with the resources necessary to thrive in their new position and remain compliant throughout the entire hiring and onboarding process. Let’s get started!

The Benefits of an Effective Hiring and Onboarding Process in Maryland

Ensuring that the hiring and onboarding process runs smoothly is essential to prepare hires to take on the hefty responsibilities of their new position. Research shows that businesses with a thorough onboarding process increase new hire retention rates by 82 percent while boosting productivity by over 70 percent. Paperwork is critical to a smooth and effective onboarding process and to remain compliant with Maryland hiring regulations.

Among the other significant benefits of an effective hiring and onboarding process are the following:

  • Attracting top talent to your business: With an effective hiring and onboarding process, you can enhance your ability to attract top talent. Streamlining and properly structuring your hiring and onboarding strategy shows your commitment to talent acquisition, attracting new candidates who want to contribute to your work.

  • Enhancing employee retention: An effective hiring and onboarding process can increase retention rates by 82 percent–but how? An effective onboarding process shows employees that their contributions are valued while presenting your company as a cohesive, organized institution. This process ensures employees have proper training and support when needed, boosting satisfaction rates.

  • Promoting a positive organizational culture: A comprehensive hiring and onboarding process promotes a more positive organizational culture. The onboarding process is the perfect time to highlight and foster your organization’s core values, creating a more positive environment and attracting talent to your business.

Essential Onboarding Paperwork in Maryland

Download The Ultimate Onboarding Checklist

Employee Eligibility Verification (Form I-9)

The new employee eligibility verification form, or Form I-9, is one of Maryland’s most important documents for a successful hiring process. The I-9 form states an employee’s eligibility to work in the United States and requires employers to verify specific hires’ identity and employment eligibility. This verification is possible through identification documents, like a driver’s license, state ID, Social Security card, or passport.

Form W-4

New hires in Maryland must also complete relevant state and federal tax forms, such as Form W-4. This document, also known as the Employee’s Withholding Allowing Certificate form, determines the amount of federal income tax eligible to be withheld from the individual’s wages. Tax withholding is subject to review by the IRS, making it vital for you and new hires to fill out Form W-4 correctly and completely.

Maryland Form MW507

This form is Maryland’s Withholding Exemption Certificate and is similar to the W-4 document that all US employees must complete for federal withholding of their wages. This form differs from the traditional W-4 in that it’s specific to Maryland residents. Form MW507 must be completed by all Maryland employees to guarantee that the employer withholds the correct amount of wages from paychecks.

New Hire Registry Form

New hires in Maryland must also complete the state’s New Hire Registry Reporting Form, which must be completed and submitted to the Maryland New Hire Registry within 20 days of the hiring date. This document requires accurate employer and employee information to verify a new hire’s eligibility for your organization.

Additional Maryland Employer Withholding Forms

Along with Form MW507, the following documents are often required in the state of Maryland during the hiring and onboarding process:

  • MW506: Employer’s Return of Income Tax Withheld

  • MW506A: Employer’s Return of Income Tax Withheld - Amended

  • MW506AM: Employer’s Return of Income Tax Withheld for Accelerated Filers - Amended

  • MW506M: Employer’s Return of Income Tax Withheld for Accelerated Filers

  • MW507M: Exemption from Maryland Withholding Tax for a Qualified Civilian Spouse of a U.S. Armed Forces Servicemember

  • MW507P: Annuity, Sick Pay, and Retirement Distribution Request for Maryland Income Tax Withholding

  • MW508: Annual Employer Withholding Reconciliation Return

  • MW508A: Annual Employer Withholding Reconciliation Return - Amended

  • MW508CR: Business Income Tax Credits - used by non-profit 501(c)(3) organizations only

  • 548P: Limited Power of Attorney and Maryland Reporting Agents Authorization - used in place of Form 8655 to report agents securing information about withholding and sales and use returns or payments delivered to the Comptroller of Maryland.

Forms and Filing Requirements for Maryland Payroll Taxes

Navigating the payroll tax process is another crucial consideration when onboarding new hires in Maryland. If you are a new employer, you must submit Form MW508 and your Application for Employer Identification Number (EIN) to properly register your business with Maryland.

Maryland employers must electronically file returns through one of the following services:

  • Maryland Business Express Online Services (MBE) for organizations in possession of a user ID

  • Maryland iFile for Maryland businesses without a user ID

  • Maryland Revenue Administration System (MRAS) for software providers

Maryland Payroll and Tax Reporting Requirements

Maryland employers are responsible for collecting and withholding state income taxes. Employers must also withhold employees’ Social Security and Medicare taxes from paychecks.

Maryland follows a graduated individual income tax system, also known as a progressive income tax. The state has income tax rates ranging from 2 to 5.75 percent, and some Maryland jurisdictions collect local income taxes. The state also has an 8.25 percent corporate income tax rate.

Applicable Maryland Labor Laws

Following Maryland labor laws is crucial to remain compliant during the hiring and onboarding and throughout your time as an employer. Consider the following labor laws as you navigate this process:

  • Overtime regulations: Maryland labor laws require an employee overtime pay rate of 1.5 times regular pay rates by Maryland Labor and Employment 3-415.

  • Final paychecks: Maryland employers must pay employees who leave their place of employment a final paycheck by the next scheduled payday, regardless of the reason for separation (resignation, termination, suspension, or laid off employees)

  • Child labor laws: Employees under 18 require a work permit before beginning a new job in Maryland. As an employer, you must provide 30-minute breaks to underage employees for every 5 work hours. Minors between 14 and 15 can only work between 7 a.m. and 7 p.m. during school and from 7 a.m. to 9 p.m. during summer. If workers are between 16 and 17, they can work between 6 a.m.-10 p.m. during the school year and until 11:30 p.m. on non-school nights.

  • Employee leave laws: Under Maryland law, employers must provide the following types of leave for all employees: Medical and Family Leave, Sick Days, Parental Leave, Jury Duty Leave, Voting Time Leave, Bone Marrow and Organ Donation Leave, Military and Family Military Leave, Crime Victim Leave, and Witness Leave.

While you don't need to memorize every law, it's important to remain familiar with the abovementioned regulations to remain compliant as a Maryland employer.

Maryland HR Duties Before First Day of Work for New Hires

Before new hires begin working with your organization, they must take proper steps to prepare for their first work day. Once individuals have completed the necessary new hire paperwork, Maryland HR professionals can take the following steps to set up new employees for success:

1. Set Up the New Employee on Payroll

If your payroll system allows, it’s best to set up new hires for payroll before they begin working. This step ensures that the new employee can clock in when they arrive for the work day.

2. Plan Office Space and Logistics

After completing the required paperwork for your new hire, you can start planning their office space and logistics to ensure their comfort as soon as they arrive. Provide the new hire with the resources necessary to thrive once training concludes. Also, ensure the new employee has the required technology, equipment, and access to organizational systems before they arrive for a successful start to their work with your organization.

3. Provide a First-Day Onboarding Kit

Prepare for a thorough onboarding process before the employee arrives on their first job day. Collect all the forms the new hire needs to sign and complete in a kit to make the onboarding paperwork process easier for everybody involved. Consider using comprehensive HR software like GoCo to make the onboarding process easier and send the new employees the required documents before their first day at work.

Plan for Onboarding Success

Navigating new hire paperwork and compliance in Maryland is difficult, no matter how experienced you are in the world of human resources. You can plan for onboarding success with solutions like GoCo.

GoCo is a comprehensive HRIS that helps small businesses eliminate time spent on manual and complicated HR tasks to focus on productivity and fostering employee and employer relationships. GoCo allows HR professionals in Maryland to simplify the onboarding process and navigate paperwork and documentation effortlessly.

Take a tour of GoCo today to learn more about how GoCo can set your organization up for success!

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