Employment Law Update

Maryland’s legislature was busy during the 2021 General Assembly with legislation that expands and amends employment laws and introduces new responsibilities for employers.

Following is a breakdown of the most significant legal developments:

New Paid Bereavement Leave Requirement

Maryland’s Flexible Leave Act, which applies to employers of 15 or more employees, permits employees to use any employer-provided “leave with pay” to cover an absence occasioned by the illness of a child, spouse or parent.

The new law amends and expands the Flexible Leave Act by allowing employees to also use their earned paid leave for bereavement following the death of a child, spouse or parent. Significantly, while most employers that provide paid bereavement leave limit the leave allowance to a week or less, there is no limit on the amount of accrued paid leave an employee can use for bereavement purposes under this new law.

Employers that already offer paid bereavement leave must decide whether to modify or discontinue offering that separate paid benefit. In addition, if an employer’s existing policy allows paid leave following the death of persons other than a parent, spouse or child, it must consider whether to allow the expanded leave rights to apply to such persons.

The law also contains an anti-retaliation provision. Employers are prohibited from retaliating against an employee who exercises their right to bereavement leave, or against an employee who files a complaint, testifies against or assists in any actions brought against an employer for a violation of this statute.

The bereavement leave law went into effect October 1, 2021.

Time Extension for Filing Employment Discrimination Complaints

A new law increases the time an individual has to file a discrimination complaint with the the Maryland Commission on Civil Rights (MCCR). The current six-month limitations period has been extended to allow complaints to be filed up to 300 days after the alleged discrimination occurs. The new limitations period applies to all discrimination complaints other than those alleging harassment. The deadline for filing harassment complaints with the MCCR was previously extended to two years in 2019.

As a practical matter, the change is unlikely to have significant impact on employers. Employees already have up to 300 days to file a complaint with the U.S. Equal Employment Opportunity Commission (EEOC), and most claims filed with one agency are cross-filed with the other.

The new law extending the filing deadline went into effect October 1, 2021.

Mini-WARN Law Changes

In 2020, Maryland joined approximately 20 states that mandate advanced written notice to employees for certain workforce reductions. (See our previous article). These state laws are collectively known as “mini-WARN Acts,” a reference to the federal Worker Adjustment and Retraining Notification (WARN) Act. Maryland’s mini-WARN law (formally known as the Economic Stabilization Act [ESA]), previously included only voluntary notice guidelines for employers faced with a reduction in operations.

The 2020 law instituting the mandatory notice requirement was unclear in many respects. In response to concerns from employers, the state legislature promulgated the recent amendment, which alters the law’s definitions, thresholds and notification requirements. The state Department of Labor states on its website that it is working to develop regulations to facilitate implementation of the new law, but it has not announced when the regulations may be expected.

Mini-WARN Law’s General Requirements

ESA applies to all employers with 50 or more employees, except employers that have been doing business in Maryland for less than one year. By contrast, the federal WARN Act applies only to employers with 100 or more employees. As a result, many Maryland employers not subject to the federal WARN Act will be subject to ESA.

For the purposes of determining whether an employer has 50 or more employees under ESA, all employees are counted except individuals who either:

• Work less than an average of 20 hours per week; or
• Have worked for less than six months in the preceding 12 months.

ESA’s Employer Notice Requirements

Under ESA, a covered employer must provide at least 60 days’ advance written notice when the employer expects to terminate employees due to a “reduction in operations.” The 2021 amendments to the ESA modify the definition of reduction in operations to include either:

• The shutting down of a workplace that reduces the total number of employees by at least 25%, or 15 employees, whichever is greater, during any three-month period (not counting employees working less than 20 hours on average each week and those who have worked less than six months); or
• The relocation of part of an employer’s operation from an initial workplace to another existing or proposed site that may reduce the total number of employees at the initial workplace by at least 25%, or 15-employee, whichever is greater.

Previously, the ESA failed to specify whether the 25%/15-employee threshold applied to relocations.

In addition, the amendments specify that in determining whether a reduction in operations has occurred, employers are not required to count employees who accept “an offer to transfer to any other site of employment within 30 days after being offered the transfer.”

New Exceptions for Employer’s ESA Notice Requirement

The amendments add two new exceptions to the ESA’s notice requirement. An employer is not required to provide the 60-day advance written notice if:

• The employer was “actively seeking capital or business that would have enabled the employer to avoid or postpone the reduction in operations,” so long as the employer “believed that providing the written notice would have precluded the employer from obtaining the necessary capital or business,” or
• The reduction in operations is due to “any form of natural disaster such as a flood, an earthquake, or a drought.” This aligns Maryland’s Mini-WARN law with the federal act, which also has an exception for natural disasters.

An employer that relies upon these exceptions to the notice requirement must still provide the required notice as soon as practicable, including a brief statement of the basis for not providing written notice at least 60 days before initiating a reduction in operations.

Unlike the federal WARN law, ESA does not offer an exception for an “unforeseeable business circumstance.” Given the possibility of future events, such as the ongoing COVID-19 pandemic, this may be a significant distinction.

Finally, for a reduction in operations that will result from the sale of part or all of an employer’s business, the notice must be provided by the seller, on or before the effective date of sale, and by the purchaser, after the date of sale.

Limiting ESA Notice Requirements to Elected Officials

Under the initial 2000 version of the law, employers had to notify all elected officials in the jurisdiction where the workplace subject to the reduction in operations is located.

Pursuant to the 2021 amendment, employers need only inform the chief elected official of the political subdivision, which may be the Mayor of Baltimore, a County Executive or the Board of County Commissioners, depending upon the location. If the workplace is located in more than one political subdivision, notice is to be given to the chief executive officer of the subdivision to which the employer paid more taxes in the year immediately preceding the reduction in force.

Penalties for ESA Noncompliance

The potential penalties for not complying with ESA remain unchanged and are significant. If the Maryland Secretary of Labor determines that a violation has occurred, the Secretary must issue an order compelling compliance. Moreover, unlike the prior “voluntary” version of the law, employers who fail to abide by the new law may face significant civil penalties. The Secretary of Labor has the discretion to assess a civil penalty of up to $10,000 per day for each day an employer violates the notice requirement.

The civil penalties are in addition to any damages and penalties for which a covered employer might be liable under the federal WARN Act. Unlike the federal WARN Act, however, Maryland’s mini-WARN Act law does not expressly provide employees with a private right of action.

ESA Takeaways for Employers

Employers familiar with the complex scheme of regulations under the federal WARN Act cannot assume that compliance with the federal law will ensure compliance with Maryland’s ESA. Significant differences between the two laws still exist, including the threshold of affected employees, the type of events that trigger the notice requirement and exceptions to notification requirements.

An employer that believes it may be taking an employment action that will trigger the requirements of either the federal or state WARN laws should consult with legal counsel as far in advance of the potential triggering event as possible.

New Law on Employers Filing Peace Order Petitions for Employees

A new Maryland law permits employers to petition for a peace order on behalf of an employee in an effort to prevent workplace violence. Bill advocates cited the significant number of workplace violence incidents and the impact it has on employees and employers. Maryland now joins 11 other states, which allow employers to file peace orders for employees.

Peace orders are a form of restraining order filed in state district court. Actions that create a justification for a peace order include acts that:

• Cause serious bodily harm or
• Place the petitioner in fear of imminent serious bodily harm, harassment, stalking and trespassing.

If a district court finds, by a preponderance of the evidence, that an act was committed or will be committed, the court may issue a peace order.

This new law allows an employer to file a petition for a peace order based upon any of the acts that would justify the employee obtaining a peace order. However, the act at issue must have taken place at the employee’s workplace within the 30-day period prior to filing the petition.

Employers are required to notify their employee prior to filing for a peace order on their behalf. Additionally, an employer may not retaliate against an employee who does not provide information for or testify at a peace order proceeding.

Employers are temporarily immune from any civil liability that may result from a failure of the employer to file for a peace order on behalf of an employee; however, the immunity provision sunsets on October 1, 2023.

Employers should review how they respond to threats and acts of workplace violence and educate supervisors to recognize and report workplace incidents that may be a basis for seeking a peace order.

If you have questions about any of these new laws, contact Charles R. Bacharach.

Charles R. Bacharach
410-576-4169 • cbacharach@gfrlaw.com