Employment Law Update: Two New Maryland Employment Laws Set to Take Effect on October 1, 2024
Date: September 26, 2024
By:
David M. Stevens
Pay Transparency in Job Postings
The new pay transparency legislation enacted this year (House Bill 649/Senate Bill 525), imposes an affirmative obligation on Maryland employers to include information about the wage range for any position that the employer posts in an internal or external forum. Prior law only required Maryland employers to disclose such information upon request by a candidate, but the new law requires that it be disclosed by the employer as part of any job posting.
An employer will now be required to disclose the “wage range” for a position as part of the posting and defines “wage range” as the minimum and maximum hourly rate or salary for the position as set in good faith by the employer. The statute further specifies that an employer may determine the wage for a particular position by reference to any one of the following: (1) any applicable pay scale that the employer has established; (2) any previously determined minimum and maximum rate for the position; (3) the minimum and maximum rates that the employer is paying other individuals holding positions comparable to the position that is being posted; or (4) the amount budgeted by the employer for the position.
The new law also requires an employer to include “a general description of benefits and any other compensation offered for the position" in any job posting. Guidance published by the Maryland Department of Labor indicates that items to be included in the disclosure of benefits would include employer-provided insurance, paid or unpaid time off (such as sick and vacation days), and retirement programs.
Employers will also be obligated to maintain a record of job postings for a period of three years under recordkeeping requirements established by the statute. The statute authorizes Maryland’s Commissioner of Labor and Industry to investigate potential violations of the statute and to issue orders of compliance as well as assess fines in the event of repeat violations by an employer.
Mandatory Disclosures in Pay Statements
Under a separate statute passed during this year’s legislative session (House Bill 385/Senate Bill 38), Maryland employers will now be required to provide specified information to employees every payday regarding their compensation. Under a preexisting statute, Maryland employers have long been required to inform employees at the time they are hired of the pay rate, leave benefits, and pay schedule that will apply to their position. The new law requires employers to disclose additional information to employees on an ongoing basis, with the disclosures to be made via either a physical paystub or online pay statement that is issued each time wages are paid to an employee.
The information that employers are required to provide to employees under the new law includes:
- The employer’s legal name as registered with the State of Maryland, as well as the employer’s address and telephone number;
- The date of payment and the dates of the payroll period to which the payment relates;
- The number of hours worked by the employee during the pay period (this information does not need to be included for employees who are working in positions that are exempt for purposes of the State’s overtime law);
- The employee’s rate of pay;
- The gross and net pay earned during the pay period;
- The amount and name of all deductions from the employee’s pay;
- A list of any additional types of pay being received by the employee in the paycheck, such as commissions or bonuses; and
- If the employee is paid at a piece rate, the applicable piece rate and the number of pieces completed at each such rate.
Failure to provide the required information can result in enforcement action by the Commissioner of Labor and Industry, as well as the imposition of a fine of up to $500 for each employee to whom the required disclosures have not been made.
These new statutes will require employers to take steps to ensure that they have updated their processes for posting open positions and issuing pay statements in order to ensure that the information required by these laws is provided to their applicants and employees, respectively. Whiteford’s Labor and Employment Law team is ready to assist employers with compliance measures.
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.