Employment Law Update

On October 1, 2024, amendments to the Maryland Equal Pay for Equal Work Law (“the Equal Pay Law”) became effective as part of a continuing push to close the gender pay gap in Maryland. Available here. Just prior to the effective date, on September 12, 2024, the Maryland Department of Labor (“MDOL”) issued Frequently Asked Questions on the amendments (“FAQ’s”), a model compensation disclosure template and narrative examples of position postings. Available here.

The Equal Pay law, which applies to all employers with employees in Maryland, regardless of size, now requires employers to include the following in every posting for a job that will be performed at least in part in Maryland:

• A good faith wage range
• A general description of benefits
• Any other compensation to be offered

Previously, employers were required to provide compensation information for a job only upon request and prohibited from asking about an applicant’s pay history. 

Posting Requirement

The new posting requirements apply whether a position is posted internally or publicly by the employer or a third party. The latter includes job recruiters or listing sites that post on behalf of the employer, such as Indeed, Monster and LinkedIn. MDOL’s FAQ’s specify that “job postings” include newspaper advertisements, printed flyers, social media posts, emails sent to more than one applicant or through an electronic mailing list and advertisements “published through any other medium.”  Significantly, the guidance specifies that employers are not responsible for job postings that are reposted by other websites without the employer’s permission.

The required “wage range” is the minimum and maximum hourly rate or salary for the job, promotion or transfer opportunity, as determined by (1) any applicable pay scale; (2) a previously determined wage range for the position; (3) the wage range of a(n) individual(s) in a comparable position; or (4) the amount budgeted for the position. If an employer plans to offer a fixed rate, rather than a range, the fixed rate must be published.  The FAQ’s provide as an example, an hourly fixed rate of “$30”, rather than a rate of “$30+,” which is impermissible.

The posting requirements only apply to jobs that will be physically performed at least partly in Maryland.  The FAQ’s provide that if the position will only occasionally perform work in Maryland, such as attendance at a meeting or conference, or remotely, it is not covered.

If the posting was not previously available to an applicant, employers must disclose the required information before any discussion of compensation and at any time, upon the request of the applicant.  

Wage Range

 The posted wage range must be made in good faith by the employer at the time of posting. The statute and the FAQ’s do not define “good faith” or account for ultimately offering a lower (or higher) wage based upon unexpected contingencies like difficulty of filling the position, missing or additional candidate qualifications than those posted, or an unanticipated unique experience that a given candidate may bring to the position.  If an employer reposts a position it may change the wage range if the new range is made in good faith, for example, if the prior range did not attract applicants.

Other compensation, in addition to wages, may not be included in the wage range and must be listed separately.  The FAQ’s provide that “any other compensation offered” is intended to be constructed broadly and lists examples to include overtime, compensatory time, differentials, premium pay, tips, commissions, bonuses, stock or stock options and any portion of service charges. The FAQ’s explicitly encourage those with questions about whether something is considered “any other compensation” to contact the Division of Labor for clarification.

Additionally, the FAQ’s state that the benefits that must be generally described in the posting include, without limitation: 

1.  Employer provided insurance such as health or life or other employer-provided insurance; 
2.  Paid or unpaid time off work such as paid sick or vacation days, or leaves of absence; 
3.  Retirement or savings funds such as 401(k) or employer-funded pension plans; or 
4.  Other forms of compensation such as the value of employer-provided meals or lodging. 

MDOL’s Model Disclosure 

The amendments to the Equal Pay Law required the Commissioner of Labor and Industry (the “Commissioner”) to issue a form that employers may use to comply with the disclosure requirements. According to the FAQ’s, use of the Commissioner’s compensation disclosure template is “completely voluntary” but an employer’s use of the “properly completed template” will “satisfy the employer’s legal obligation to provide the required disclosures.”  MDOL also issued a link to more narrative examples. Notably, the template and narrative examples, provide for identification of specific amounts of paid leave, whereas the law and the FAQ’s only require a “general description” of such benefits. 

Expansion of Anti-Retaliation Protections

The amendment also expanded prohibited actions by employers relating to retaliation.  Under the original version of the law, employers were (and still are) prohibited from retaliating in interviewing, hiring, and employment against an applicant who refused to provide their wage history or asked for the wage range of the position. Now anti-retaliation protections are extended to  current employees with respect to promotions or transfers and to employees and applicants who exercise any rights under the Equal Pay law.

Recordkeeping

Employers will be required to keep records of compliance for three (3) years beginning after the position is filled or, if it is not filled, after the position was initially posted.  These records include copies of the actual postings.

Enforcement/Penalties

There is no private right of action for violation of the Equal Pay Law, but the Commissioner may issue an order compelling compliance for a first violation, a civil penalty of up to $300 for each employee or applicant for whom the employer is not in compliance for a second violation, and a penalty of up to $600 for each employee or applicant for whom the employer is not in compliance within three years after a previous determination of non-compliance for each subsequent violation. For violation of the law’s anti-retaliation provisions, the Commissioner may seek reinstatement and backpay, and assess a civil remedy of up to $1000 for each employee against whom the Commissioner has found retaliation. 

Going Forward

While not required by the statute, employers should consider documenting the reasons that they have selected posted wage ranges as well as any reasons for deviation from that range when making an offer of employment, promotion or transfer. Employers should also consider the language and specificity of disclosures so as not to hamper their ability to modify discretionary benefits, such as vacation or leave beyond that which is required by applicable statute. Maryland employers should also consider the pay transparency laws of other states and localities in which they are recruiting for both Maryland and remote employees.

Before discussing compensation, applicants for jobs with a new employer or employees who are seeking a promotion or transfer may ask for wage ranges, benefits and other compensation if it has not already been provided in a job posting. If it is not provided, or if an applicant or employee feels that they have been subject to retaliation in violation of the Equal Pay Law, they may file a complaint with MDOL. 
 

Melissa Menkel McGuire
410-576-4201 • mmcguire@gfrlaw.com