Commercial cleaning and janitorial insurance in Maryland

Maryland's rules for cleaning companies: SDAT, sales tax and school screening

A Maryland cleaning company registers its entity with the State Department of Assessments and Taxation, keeps its annual report current, and holds a sales and use tax license from the Comptroller, because cleaning commercial buildings is taxable. Maryland doesn't license commercial cleaning as a trade.

SDAT filing and the April 15 annual report

You form the entity with SDAT through Maryland Business Express. Every domestic and foreign entity then files an Annual Report, together with the Business Personal Property return, by April 15, or by June 15 if an online extension is approved. An entity that falls behind can be forfeited and has to file all past-due reports to be revived. Montgomery County sets its own minimum wage above the state's, so check county rules where your crews work.

Sales tax on commercial building cleaning

Tax-General §11-101(m)(3) makes cleaning of a commercial or industrial building a taxable service. Section 11-101(c) defines it as floor, carpet, wall, window, ceiling and exterior cleaning and janitorial services performed on a commercial or industrial building. The rate is 6%, and you collect it under a sales and use tax license from the Comptroller. Confirm the current rule with the Comptroller of Maryland or your CPA.

The living wage on state service contracts

Maryland's Living Wage Law isn't written only for cleaning, but it reaches janitorial bids directly. Contractors and subcontractors on a State service contract of $100,000 or more pay the living wage to employees who spend at least half a workweek on that contract. Employers with 10 or fewer employees and a contract under $500,000 are exempt, as are contracts with nonprofits.

The rate depends on where the work is. From September 29, 2026, the Tier 1 rate (Montgomery, Prince George's, Howard, Anne Arundel and Baltimore counties plus Baltimore City) is $17.54 an hour, and Tier 2 work (every other county) pays at least $15.00. Contractors pay the higher of the living wage or the state or local minimum wage, so employers with 51 or more workers pay Montgomery County's $18.00 minimum there from July 1, 2026. The agency names the tier on the bid. The Maryland Department of Labor publishes current rates.

Screening crews who work in schools

Under Family Law §5-550, a contractor or subcontractor with direct, unsupervised and uncontrolled access to children in a covered facility counts as an "employee," and public schools and reporting nonpublic schools are covered facilities. Those workers need a criminal history records check.

Education §6-113(b) adds a contract rule: every local school system contract must bar the contractor from knowingly assigning a worker with that kind of access if the worker has been convicted of listed sexual offenses, child sexual abuse or a crime of violence.

How Maryland workers' comp treats cleaners, officers and 1099s

Maryland's comp law leans toward coverage. Labor & Employment §9-202 treats a person you've hired to work as your covered employee, and the burden falls on you to show, under common-law rules, that they're really an independent contractor. For a cleaning company that sends people into client buildings on your schedule, that presumption is hard to overcome.

Paid corporate officers and LLC members are covered employees too, but some can elect out under §9-206: officers of close corporations, officers of other corporations who meet the conditions, and LLC members holding at least 20% of the profits interest. The exemption takes written notice to the Workers' Compensation Commission and to your insurer.

Skipping comp in Maryland is a misdemeanor under §9-1107. A conviction can bring as much as $5,000 in fines and a jail term of up to one year, or both. For a corporate cleaning company, the person on the hook is whichever officer handles general management.

Maryland is an NCCI state, so contract janitorial crews generally rate under class 9014, "Janitorial Services by Contractors – No Window Cleaning Above Ground Level & Drivers." Your carrier assigns the class. The Maryland Workers' Compensation Commission handles exemption filings.

What a Maryland courthouse cleaning bid demanded

Government buildings in Maryland come with long insurance exhibits. The Judiciary's invitation for bids for janitorial service at the Annapolis District Court (Project K22-0009-40, July 2021) required:

• workers' comp under Maryland law, with employer's liability of $500,000 each accident, $500,000 disease per employee and $500,000 disease policy limit
• occurrence-form general liability: bodily and personal injury at $1,000,000 per occurrence (twice that in the aggregate), property damage at $1,000,000, including completed operations, contractual liability and broad-form damage to the Court's property
• business auto of $1,000,000 bodily injury and $1,000,000 property damage, including hired and non-owned autos
• the Administrative Office of the Courts and the Judiciary named as additional insureds on every policy, and 60 days' notice of cancellation

An umbrella could make up the limits, and subcontractors had to carry the same coverage. Every cleaner needed a Court-approved background check, written approval from the district's Administrative Judge and an annual Judiciary ID badge, with fees paid by the contractor.

That "damage to the Court's property" line is a care, custody and control question, separate from theft by staff, which is what a janitorial bond addresses. Our guide to cleaning contract requirements explains how these lines fit together.

Get a quote for your cleaning business →

Maryland risks that cost contracts

A screening lapse on a school account

Maryland treats contractor staff with unsupervised access to children as employees who need checks, and Montgomery County Public Schools calls non-compliance a material breach. One unscreened substitute on a night shift can cost the contract. It also raises abuse and molestation exposure that many GL policies limit or exclude.

Badge and approval delays in government buildings

Judiciary contracts require every worker to pass a Court-approved check, get written approval and carry an annual badge before working. A rejected or unbadged worker means a short-staffed night and possibly a missed scope. Damage to the client's property during the work is a separate care, custody and control question.

Bidding the wrong living-wage tier

A Tier 1 state contract pays $17.54 an hour from September 29, 2026, and Tier 2 pays $15.00. Bid a Columbia or Bowie account at the lower rate and the gap comes out of your margin. Wage obligations aren't something insurance usually pays.

Maryland cities and the rule that matters in each

What drives a Maryland cleaning company's insurance cost

We don't publish Maryland prices, but a few local factors are worth knowing.

Comp premium follows payroll, and Maryland's living-wage tiers set payroll on state accounts. The same crew costs more per hour on a Tier 1 contract at $17.54 than on a Tier 2 contract at $15.00.

Government bids also set higher limits than many private clients do: $500,000 employer's liability, a $2 million liability aggregate, and hired and non-owned auto. Meeting those can mean an umbrella. Background checks and badge fees are a cost of the contract too, though not of your insurance.

Your price depends on the payroll in each class code, your annual sales, the kinds of buildings you clean, how much specialty and chemical work you do, the vehicles your crews drive, your claims history and the limits your contracts require. Our insurance cost guide for cleaning companies explains each factor.

Get a quote for your cleaning business →

Our Maryland license and how we quote there

Commercial Cleaning Insurance Group is a brand of The Allen Thomas Group, licensed in Maryland (License #3003445098, NPN 7642818).

For Maryland accounts, our licensed team starts with your bid exhibit and building list and talks with you before quoting.