Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
It is safe to say that spring 2020 will not soon be forgotten. While the COVID-19 pandemic dominated the news and the attention of federal and state governments alike, the Maryland General Assembly passed several new laws affecting the workplace. In addition to the emergency measures implemented to address the economic impacts of the pandemic, new laws affect worker safety, wages, discrimination, and workers’ compensation. Some of these laws require Maryland employers to affirmatively make changes to their policies and practices.
These bills became law on May 7, 2020, with the effective date of October 1, 2020.
Amendments to the Equal Pay for Equal Work Act
First, the General Assembly significantly amended the Equal Pay for Equal Work Act by restricting how much an employer (or prospective employer) can inquire about an employee’s or applicant’s wage history and providing protections to employees who wish not to voluntarily reveal wage history. The purpose of the Wage History and Wage Range amendment (HB123/SB217) is to address the long-term impact of the gender wage gap that can be perpetuated (often unknowingly or unintentionally) by using an applicant’s wage history to set the wage rate upon hire.
As of October 1, 2020, during the hiring process, if requested by a job applicant, the employer must provide the wage range for the position to which the applicant applied. Additionally, as of that date, employers will be prohibited from: (1) retaliating against or refusing to interview, hire or employ any job applicant who either (a) did not provide wage history on a job application, or (b) who requested information about the wage range for the job to which the applicant applied; (2) relying on the applicant’s wage history as a way to screen a job applicant for the position, or when determining the wages for the applicant if that person is hired; or (3) seeking the wage history of an applicant either orally, in writing, or through another employee, an agent, or from the applicant’s former or current employer.
The law does provide for some limited exceptions to the prohibition against obtaining/using wage history information. After the applicant has received an initial offer of employment and that offer includes a specific compensation figure, an employer may: (1) rely on any wage history voluntarily provided by the applicant to support a wage offer higher than the initial wage offer; and (2) seek to confirm the wage history voluntarily provided by the applicant to support a wage offer higher than the initial wage offer. These two exceptions are, however, subject to the additional restriction that the higher wage may not create a pay differential based on sex and/or gender identity, which is unlawful.
As such, this law will require an employer to create formal wage ranges for all of its positions and train its human resources and supervisory teams on how to comply with these new requirements.
Second, the Maryland General Assembly amended the Equal Pay for Equal Work Act by preventing employers from retaliating against an employee for inquiring about their own wages. This amendment (HB14) was enacted to correct a loophole in the language of the law. Before the amendment, employers were prohibited from retaliating against an employee for inquiring about the wages of other employees only. The amendment extends these protections to circumstances where employees inquires about their own wages.
Limitations on “Use of Facial Recognition” during Interview Process (HB1202)
In what might wind up becoming a nation-wide trend, Maryland imposed restrictions on the use of artificial intelligence (AI) during the interview process. In the last several years, several technology companies have created software that uses AI and facial recognition technology to evaluate candidates. Following in the footsteps of Illinois, Maryland has taken an initial step in regulating the use of facial recognition technology during the interview process.
Employers are not permitted to use facial recognition technology for the purposes of creating a facial template during the interview process unless the applicant expressly agrees to the use of this technology. Facial recognition technology is defined as technology that analyzes facial features and is used for recognition or persistent tracking of individuals in still or video images. Facial template is defined as the machine-interpretable pattern of facial features that is extracted from one or more images of an individual by a facial recognition service.
The applicant must agree, in writing, to the use of this technology during the interview process in advance of its use. The written waiver must include the following information:
- The applicant’s name;
- The date of the interview;
- That the applicant consents to the use of facial recognition; and
- A statement that the applicant has read the waiver and consents to it.
General Assembly Converts the Maryland Mini-WARN Act Governing Mass Layoffs From Discretionary to Mandatory, among other Requirements (HB1018/SB780)
Maryland enacted amendments to its Economic Stabilization Act to require that an employer implementing a “reduction in operations” must provide 60 days’ advance notice to employees and others, and also provide continuation of health, pension, severance and/or other benefits to affected employees on terms yet to be developed by the state secretary of labor. These obligations are triggered by the closure of all or a portion of operations affecting as few as 15 employees, as well as by relocations of operations. The change was enacted on May 7, 2020, as a result of Governor Hogan’s decision not to veto legislation passed in March.
The Terms of the Amendment
The law replaces prior voluntary guidelines, and implements three critical changes: (1) mandatory 60 days’ written notice, (2) mandatory continuation of benefits, and (3) orders of compliance and fines for violations.
These now-mandatory obligations apply to any person or entity that employs at least 50 employees and operates an industrial, commercial, or business enterprise in Maryland. The law does not specify whether employees outside of Maryland are counted toward this employer coverage test.
Obligations under the law are triggered by a “reduction in operations,” which is considerably broader than the triggering events under the federal Worker Adjustment and Retraining Notification (WARN) Act or any other state equivalent. A Maryland “reduction in operations” includes (1) a relocation of part of an employer’s operations, and (2) the shutdown of a workplace, or portion of operations, that reduces the number of employees by at least 25% or 15 employees, whichever is greater, over any three-month period.1 With respect to the relocation trigger, the law does not specify whether 25% or 15 employees must have their employment terminated, or whether the relocation must involve a significant distance.
- Mandatory 60 Days’ Notice
Employers are obligated to provide 60 days’ written notice of a reduction in operations (RIO) to the following persons and entities:
- All employees at the workplace that is subject to the RIO;2
- Each exclusive representative or bargaining agency [sic] that represents employees at the workplace that is subject to the RIO;
- The Division of Workforce Development’s dislocated worker unit; and
- All elected officials in the jurisdiction where the workplace that is subject to the RIO is located.
Whether the law requires notice to all employees at the workplace, or only those the employer expects to lay off, is not clearly addressed.
- Continuation of Benefits
The state secretary of labor is directed to develop regulations that shall include the continuation of benefits, such as health, severance, and pension, that an employer facing a reduction in operations should provide to employees whose jobs will be terminated.
- Orders and Fines
The amendment empowers the state secretary of labor to issue both orders compelling compliance and fines for violations of the notice requirement. Where a violation is found, the new law requires that the secretary issue an order compelling compliance, and gives the secretary discretion to assess a civil penalty up to $10,000 per day (up to a potential total of $600,000).3 Factors taken into consideration when determining the penalty are (1) the gravity of the violation, (2) the size of the employer’s business, (3) the employer’s good faith, and (4) the employer’s history of violations under the law. In contrast to this potential $600,000 penalty exposure, federal WARN and most other state WARNs carry a maximum monetary penalty to governmental entities of $30,000. The Maryland law does not expressly address whether it authorizes private rights of action, or instead requires that all claims must be presented to the state secretary of labor.
For additional information on Maryland’s “mini-WARN” Act, please see our separately published ASAP.
Requirement to Protect Employees from Heat Stress (HB722)
Under this law, employers will be required to implement certain measure to protect their employees from “heat-related illness”4 caused by “heat stress.”5 The law defines “employer” broadly to include any “person who is engaged in commerce, industry, trade, or other business in the State and employs at least one employee in that business,” public bodies, persons who own or operate a taxicab business in Baltimore City and leases or rents a taxicab driver to provide services to the public, and certain governmental units.
The Commissioner of Labor and Industry and the Maryland Occupational Safety and Health Advisory Board have until October 1, 2022 to develop regulations that require employers to protect employees from heat-related illness caused by heat stress. Before these regulations are implemented, the state will hold informational hearings in four different regions of the state to gain input from interested parties.
Increased Cap on Amount of Back Wages for Commissioner to Issue a Notice of Failure to Pay Wages to Employer (SB119)
The Maryland Wage Payment and Collection Law was amended by increasing the maximum amount of unpaid wages—from $3,000 to $5,000—claimed by an employee for which the Maryland Department of labor (MDOL) may issue a complaint to an employer. As a result, employers should expect additional claims of unpaid wages from the MDOL.
An Amendment to the Maryland Fair Employment Practices Act Expands the Definition of “Race” (HB1444)
The Maryland Fair Employment Practices Act, the state anti-discrimination statute, prohibits discrimination on the basis of several protected classes, including race. This amendment broadens the scope of the definition of “race” to “include traits associated with race, including hair texture, afro hairstyles, and protective hairstyles.” Protective hairstyles include braids, twists, and locks.
Reporting Period for Workplace-Caused or Exacerbated Hernias (SB784)
Under the previous law, an employee who suffered a hernia due to a workplace accident, or whose existing hernia was exacerbated by a workplace accident, was obligated to report the injury within 30 days to the employer or the employee risked being permanently blocked from receiving workers’ compensation benefits for that injury. The new law keeps the standard of proof the same, but extends the reporting period to 45 days.
The new law also creates an exception to the 60-day filing deadline for a compensation claim whereby an employee may still be able to obtain benefits if they file the claim within two years of the date of the injury unless the employer or its insurer has been prejudiced by the employee’s failure to report the injury sooner.
Maryland Enacts a Statewide “Ban-the-Box” Law
During the 2019 legislative session, Governor Larry Hogan vetoed the Criminal Records Screening (or “Ban-the-Box”) Act. On January 30, 2020, however, the Maryland General Assembly overrode the governor’s veto, making it unlawful for any employer in the state of Maryland with 15 or more employees to inquire into an applicant’s criminal history before the employer conducts its first in-person interview. The law takes effect on February 29, 2020. Importantly, the law does not preempt the more restrictive ban-the-box ordinances enacted in Montgomery County, Prince George’s County, and Baltimore City.
Montgomery County Passes County Legislation that Establishes Minimum Workweek for Building Maintenance Workers
Effective January 1, 2021, building maintenance workers working for a covered employer are entitled to a minimum workweek of at least 30 hours per week unless the employee is taking certain types of covered leave. A covered employer is permitted to reserve 30% of the total hours scheduled for all the maintenance work for part-time workers with a minimum shift of four hours per day and 20 hours per week per part-time worker.
Employers affected by this law are those entities operating in Montgomery County that employ one or more person(s) as a building maintenance worker in any office building or contiguous group of office buildings under common ownership or management occupying a total of 350,000 or more square feet in the county, and have an occupancy rate of 50% or more.
This minimum workweek applies to “building maintenance workers,” which the bill defines as someone who works for a covered employer as a janitor, building cleaner, security officer, concierge, doorperson, handyperson, or building superintendent who performance janitorial services. Maintenance workers do not include managerial workers, those who work in an executive, administrative, or professional capacity, employees who make more than $30.50 per hour, those who work only on Saturdays or Sundays, and temporary replacements.
In addition to establishing a minimum workweek, the legislation prohibits any employer from retaliating against any person who opposes a violation of these minimum standards, who files a complaint with the Montgomery County Office of Human Rights, or who participates in any investigation of a violation or other proceeding before the Office of Human Rights.
Employers should carefully review Maryland’s new “mini-WARN” Act with experienced counsel before implementing reductions in force or relocations of jobs within Maryland on or after October 1, 2020. Employers should also consider reviewing their hiring practices in light of the new requirement to provide wage ranges for positons, if requested by an applicant.
1 To calculate whether this minimum is exceeded, the statute does not count persons who work on average less than 20 hours per week or have worked for the employer for less than 6 months in the immediately preceding 12 months.
2 If notice is due, the statute requires notice to employees regardless of hours of work or tenure.
3 No penalty may be assessed before notice and hearing is provided to the employer.
4 The law defines “heat-related illness” as a serious medical condition resulting from the inability of the body to rid itself of excess heat, including heat rash, heat cramps, heat exhaustion, heat syncope, and heat stroke.
5 “Heat stress” is defined as the net load to which a worker is exposed from the combined contributions of metabolic heat, environmental factors, and clothing worn that results in an increase in heat storage in the body, causing body temperature to rise to sometimes dangerous levels.