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Employment Law Update: Maryland’s Restrictions on Non-Compete Agreements for Healthcare Professionals, Among Other Employment Laws, Took Effect July 1, 2025

Date: July 18, 2025
As of July 1, 2025, Maryland prohibits or restricts non-compete provisions for nearly all healthcare professionals. The prohibition applies to individuals: (1) required to be licensed under the Maryland Health Occupations Article (licensed physicians, nurses, physical therapists, social workers, etc.), (2) who provide “direct patient care,” and (3) who earn less than $350,000 annually.

Non-competes for healthcare professionals earning more than $350,000 in “total annual compensation” are now restricted to no more than 1 year in duration, and the geographic scope may not exceed 10 miles from their primary place of employment.

Notably, non-compete agreements with licensed healthcare professionals prior to July 1, 2025, are still valid, subject to their enforceability. The new law is not retroactive.

Practical Guidance for Maryland Employers and Looking Ahead

Maryland’s latest amendments underscore a nationwide shift toward narrowing or eliminating post-employment restraints, particularly in the healthcare sector, where patient access and practitioner mobility are increasingly prioritized. 

Affected employers should review template documents to ensure offer letters, employment contracts and any related documents issued after July 1, 2025, do not contain invalid provisions.

Employers relying on restrictive covenants should pivot to alternative risk-mitigation strategies: stringent confidentiality provisions, tailored non-solicitation clauses, and incentives that encourage retention without impeding competition.

Other Employment Law Changes Effective July 1st

Other notable employment laws going into effect on July 1, 2025, include a statewide minimum wage of $15.00/hour regardless of employer size.

Additionally, the minimum wage for Montgomery County employers with 51 or more employees will rise to $17.65. For employers with between 11 and 50 employees, the minimum wage will increase on July 1 from $15.50 per hour to $16.00. Finally, for employers with 10 or fewer employees, the minimum wage rate will rise from $15.00 to $15.50 per hour.

Also in Montgomery County, tipped employees (earning more than $30 per month in tips) must now be paid at least $4.00 per hour. This amount plus tips must be equal to or greater than the Montgomery County Minimum Wage Rate. Restaurant employers who utilize a tip credit are required to provide employees with a written or electronic wage statement for each pay period showing the employee’s effective hourly rate of pay, including employer-paid cash wages plus tips for tip credit hours worked for each workweek of the pay period.

Finally, Maryland’s Paid Family and Medical Leave program will not go into effect until 2028, per legislation that also became effective July 1, 2025.

Whiteford’s Labor and Employment practice group is working with employers to keep up to date with recent changes, including assisting numerous healthcare employers in revising agreements and developing compliant onboarding procedures. If you have questions about how the most recent changes affect your existing contracts or if you would like a comprehensive compliance review, please reach out to our team.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.