Dialects represent a significant component of human culture and are found across all regions of the world. In Germany, more than 40% of the population speaks a regional dialect (Adler and Hansen, 2022). However, despite cultural importance, individuals speaking dialects often face negative societal stereotypes. We examine whether such stereotypes are mirrored by large language models (LLMs). We draw on the sociolinguistic literature on dialect perception to analyze traits commonly associated with dialect speakers. Based on these traits, we assess the dialect naming bias and dialect usage bias expressed by LLMs in two tasks: an association task and a decision task. To assess a model's dialect usage bias, we construct a novel evaluation corpus that pairs sentences from seven regional German dialects (e.g., Alemannic and Bavarian) with their standard German counterparts. We find that: (1) in the association task, all evaluated LLMs exhibit significant dialect naming and dialect usage bias against German dialect speakers, reflected in negative adjective associations; (2) all models reproduce these dialect naming and dialect usage biases in their decision making; and (3) contrary to prior work showing minimal bias with explicit demographic mentions, we find that explicitly labeling linguistic demographics--German dialect speakers--amplifies bias more than implicit cues like dialect usage.