MD HB1438

Establishes a minimum salary threshold of $1,128 per week for employees to qualify as exempt from overtime pay under administrative, executive, or professional exemptions, effective July 1, 2025

Requires exempt employees to meet specific duties tests: administrative employees must exercise discretion on significant matters; executive employees must manage operations and direct two or more workers with hiring/firing authority; professional employees must perform work requiring advanced specialized knowledge or creative talent

Mandates annual increases to the exemption salary threshold beginning July 1, 2026, based on the Consumer Price Index for the Washington-Baltimore metropolitan area

Requires the Commissioner of Labor and Industry to determine and announce the CPI growth rate and new compensation threshold by March 1 each year, with the new rate taking effect the following July 1

Maintains the exemption salary at the previous year's level if the CPI shows no growth or declines, and applies whichever threshold is higher between the state rate or the federal rate in 29 C.F.R. § 541.600