I think I know the answer to this, but I didn't see any thing in my search that included Maryland, and I wanted to make sure I was correct. I have an employee that has turned in a time sheet with 41.5 hours on it. and out of that time 16 hours are sick time. Am I correct in saying that overtime would only apply to time actually worked, or is this employee correct in stating that they are owed overtime. this is the first time an employee has asked for overtime after calling in sick, most want to hold onto the time for future use. We pay PTO in increments of 1 hour.

In all 50 states, overtime applies only to time WORKED, not time PAID. Unless the employee WORKED over 40 hours a week (over 8 hours a day in a couple of states but yours is not one of them) they are not due overtime regardless of how many hours they are PAID for.