Employment Law Update

Since its passage in 1993, the federal Family and Medical Leave Act (FMLA) has required employers with 50 or more employees to provide 12 weeks of parental leave to eligible employees. Under the new Maryland Parental Leave Act (MPLA), smaller Maryland employers will now join larger companies in having to provide parental leave.

Covered Employers

The new law applies to employers that employ between 15 and 49 employees in the state during each of 20 or more workweeks in the current or preceding calendar year. The term “employer” is broadly defined to include persons who act, directly or indirectly, in the interest of an employer with respect to an employee. However, the MPLA provides that a supervisory employee of an employer may not be held personally liable for a violation of the law.

Eligible Employees

Individuals are eligible for the parental leave benefit if (a) they have been employed for at least a 12-month period and 1,250 hours during the previous 12 months as of the date the requested parental leave begins and (b) they are employed at a work site at which the employer employs at least 15 employees within 75 miles of the work site. Independent contractors are also not considered employees under the law. Note that Maryland is becoming more aggressive in challenging whether individuals are properly classified as an independent contractor (instead of as an employee).

The Leave Entitlement

Eligible employees are entitled to a total of 6 work weeks of unpaid parental leave during any 12-month period for either the birth of a child, or the placement of the child with the employee for adoption or foster care. The law does not define how the 12-month period is determined, but, presumably, an employer is free to use any of the four measurements authorized under the FMLA: the calendar year, a period measured from the employee’s anniversary date (or other fixed date, such as the start of a fiscal year), a rolling 12-month period measured backwards from the date the leave is to commence, or the 12-month period measured forward from the date any employee's leave begins. The MPLA also leaves open how the 6 workweeks of leave must be taken. Under the FMLA, the leave must be taken in one continuous absence, unless the employer agrees that leave can be taken in separate shorter periods.

Required Notice By Employees

In general, an employee must give his/her employer written notice of the employee’s intention to take parental leave at least 30 days in advance. That notice requirement does not apply in the case of a premature birth or an unexpected adoption or foster placement.

An employer may deny leave to an eligible employee if the denial is “necessary to prevent substantial and grievous economic injury” to the business and the employer notifies the employee of the denial before the employee begins taking the leave.

Return to Work Rights

An employee returning from parental leave is entitled to be restored to the position he/she held when the leave began, or to an equivalent position with equivalent benefits, pay and other terms and conditions of employment. Of course, finding an “equivalent” position in a small company may prove far more difficult than in larger workplaces, so this may not be a practical alternative for some employers. An employer may deny job restoration if the denial is necessary to prevent “substantial and grievous economic injury” to the business and the employer notifies the employee of its intent to deny job restoration at the time the employer determines economic injury will occur, and, in the case of a parental leave that has already begun, the employee elects not to return to work after receiving notice of the employer’s intention not to restore the employee to his/her job.

Under the MPLA, an employer may only terminate the employment of an employee during a covered parental leave if the termination is “for cause.”

Health Benefits Must Be Maintained During Parental Leave

An employer must maintain an eligible employee’s coverage under a group health plan during any parental leave period on the same terms the coverage would have been provided if the employee had not taken leave. If the employee fails to return to employment after the leave ends, the employer may recover the premium the employer paid for maintaining the group health coverage, unless the employee fails to return because of circumstances beyond his/her control.

Paid Vacation Time and Special Provisions for Commissioned Employees

Leave under the MPLA is unpaid. An employer may require an employee, or the employee may elect, to substitute any available paid vacation leave for all or part of the unpaid parental leave period. Employees who work on a commission basis must be paid for any commission that becomes due during the MPLA leave because of work the employee performed before starting the leave.

Violations, Enforcement and Damages

The Department of Labor, Licensing and Regulation (DLLR) is expected to adopt regulations to implement the new law. If DLLR determines that an employer has violated the law, it may try to resolve the dispute informally by mediation or it may ask the Attorney General’s office to bring an action in court against the employer. Employees may also bring a private cause of action against the employer to recover any lost wages, benefits or other compensation, and an equal amount as liquidated damages. If a court determines that the employee is entitled to judgment, it must also award the employee reasonable attorney’s fees and costs. Employers are prohibited from hindering or delaying any enforcement effort by DLLR, or from retaliating against an employee because the employee has requested or taken parental leave, complained to the employer or DLLR, brought a court action under the law, or testified in such an action.

Next Steps for Small Employers

Although the new parental leave law does not require employers to have a parental leave policy, it will generally be beneficial for employers to have a written policy that describes employee rights and obligations under the law. It will also be important to educate supervisors on the requirements of the new law. Supervisors must understand that retaliation is prohibited and even discouraging employees from using their parental leave rights may lead to legal action against the employer.

If you would like information or assistance in complying with the new Maryland Parental Leave Act or with any other issue relating to an employer’s obligations with respect to leaves of absence, please contact Chuck Bacharach, 410-576-4169, or Bob Kellner, 410-576-4239.