Maryland's recently concluded legislative session was particularly active on the labor and employment front. Gov. Wes Moore signed a host of new bills into law that will profoundly impact employers throughout the state.
These new laws address everything from non-competes to retaliation, from pay and benefit notice requirements to employee classification, to pay transparency, workplace discrimination, and family leave. Employers need to understand their new obligations and employees' expanded rights to ensure compliance and avoid costly claims and penalties.
The following is an overview – but far from a comprehensive dissection – of recently enacted legislation governing employment relationships in Maryland.
HB1388/CH378: Ban On Non-Competes Extended To Certain Health Care Providers and Veterinarians/Vet Techs
Effective Date: June 1, 2024, but only applies to agreements entered into, on, or after July 1, 2025
HB1388/CH378 prohibits non-compete agreements for (1) licensed healthcare providers doing direct patient care who make less than $350,000 (in total annual compensation) and (2) veterinarians/veterinary technicians.
For any non-compete or conflict of interest provision to be valid and enforceable for licensed healthcare providers earning $350,000 or more, the provision:
- Cannot last for more than 12 months after termination.
- Must be limited in geographic scope to 10 miles from the health care provider’s primary place of employment.
The law requires the employer to provide a patient of the health care provider with their new location, if requested by the patient.
HB0244/CH104: Penalties for Occupational Safety and Health Act Violations Increase
Effective Date: July 1, 2024
HB0244/CH104 increases the maximum and minimum civil penalties that may be imposed on employers for violations of the Maryland Occupational Safety and Health Act.
For violations occurring before July 15, 2025, the maximum penalty for minor violations will be $16,131, while the minimum penalty will be $11,162. The maximum penalty for willful or repeated violations occurring before July 1, 2025 will be $161,323. The Commissioner of Labor and Industry is empowered to raise both minimum and maximum penalties annually starting July 15, 2025, pegged to the Consumer Price Index.
HB0136/CH207: No Retaliation for Wage Inquiries, Complaints, or Testimony
Effective Date: July 1, 2024
HB0136/CH207 prohibits employers from taking adverse employment action against any employee who inquires about wage rights, makes a complaint about wage violations, or testifies about a wage claim. Adverse employment action includes demotion, discharge, threats of the same, or other retaliatory actions. Violations of this law can lead to civil claims for reinstatement, lost wages, and compensatory damages, as well as civil penalties of up to $1,000 per employee.
HB0385/CH306: Written Notice of Compensation, Pay Dates, and Leave Benefits at Hiring Required
Effective Date: October 1, 2024
HB0385/CH306 requires employers to provide new employees with written notice of compensation rates, pay dates, and leave benefits at the time of hiring. Although the duty to provide such information at hire has been in effect for many years, such notice previously did not have to be in writing (although wise employers would always do so to demonstrate compliance). Employers should pay close attention to the duty to provide information about leave benefits: As has long been the case under Maryland law, unless an employee is informed at the time of hire of the reasons accrued or paid leave will not be paid at termination, it must be paid as part of final wages.
This new law also requires employers to provide the following information in writing on each employee’s paystub or online wage statement each pay period:
- The employer's name, address, and phone number as registered with the state.
- The date of payment and the beginning and end dates of the pay period.
- The number of hours worked during the pay period (unless the employee is exempt from overtime requirements under federal and state law).
- The pay rate.
- The gross and net pay earnings during the pay period.
- The amount and name of all deductions.
- A list of additional bases of pay, including bonuses, sales commissions, or other.
- For piece-rate employees, the applicable piece rates of pay and the number of pieces completed at each piece rate.
The new law directs Maryland's Commissioner of Labor and Industry Department to create and make available to employers a free pay stub template they may use to comply with the law's notice requirements.
HB0465/CH309: Increased Penalties for Misclassification of Certain Workers
Effective Date: October 1, 2024
HB0465/CH309 increases the penalty for misclassifying employees as independent contractors in the construction and landscaping industries to up to $10,000 per violation. This amendment to the Workplace Fraud Act removes criminal penalties from the prior version of the law but adds that if there is clear and convincing evidence of misclassification, the commission will refer complaints alleging violations of the tax code to the state comptroller, state's attorney, U.S. Department of Justice, U.S Department of Labor, and U.S. Treasury Department.
HB0649/CH271 – More Pay Transparency Required
Effective Date: October 1, 2024
HB0649/CH271 joins a nationwide wave of pay transparency legislation that requires employers to proactively disclose compensation and benefits information in all job postings, not just upon an applicant's or employee's request. Employers will now need to include the wage range, a description of benefits, and a description of other compensation offered in every ad or job posting for a position in Maryland. They must also disclose the wage range and benefits to someone who applies for a position without a job posting (such as an internal transfer) before compensation is discussed or when requested by the applicant.
The law directs Maryland's Commissioner of Labor and Industry to develop and publish a form that employers can use to comply with the law, and employers must retain records of compliance for at least three years after initially posting or filling a position.
HB0602/CH131: No Sexual Orientation-Based Pay Discrimination
Effective Date: October 1, 2024
HB0602/CH131 amends and expands the state's Equal Pay Act and other laws that currently prohibit compensation discrimination on the basis of sex or gender identity to also prohibit discrimination on the basis of sexual orientation.
HB0702/CH245: Minimum Wage for Minor League Baseball Players
Effective Date: October 1, 2024
HB0702/CH245 excludes minor league baseball players from coverage under the state's wage and hour law (minimum wage and overtime requirements) if they are compensated under a collective bargaining agreement.
HB0598/CH322: No Discrimination Based on Military Status
Effective Date: October 1, 2024
HB0598/CH322 amends the Maryland Human Relations law by prohibiting employment discrimination based on "military status," which includes members of the armed forces and reserves and their dependents.
HB0571/CH267: More Delays and Modifications to the Paid Family and Medical Leave Insurance (FAMLI) Program
Effective Date: July 1, 2025
Under the FAMLI program, eligible employees are entitled to up to 12 weeks of leave for their own serious health condition, to care for a family member with a serious health condition, bonding leave, or military caregiver/exigency leave. If the employee needs 12 weeks for their own serious health condition and gives birth in the same year, they can take another 12 weeks of leave. Paid leave under the program is funded through payroll contributions.
In response to challenges the Maryland Department of Labor has experienced with the implementation of the FAMLI program, HB0571/CH267 again extends the program's start dates. Required payroll contributions have been delayed from October 1, 2024, to July 1, 2025. Benefit payments have also been delayed from January 1, 2025, to July 1, 2026.
The legislation also modifies prior provisions related to the payment of contributions, calculating the average weekly wage, submitting claims for benefits, and applying the program to self–employed individuals.
As noted, this is only a top-level overview of these new employment laws. Each has details and nuances that Maryland employers should familiarize themselves with.
If you have questions or would like additional information about any or all of these new laws, please contact Melissa Jones at Tydings.