In the latest Weekly Wright Report:
Maryland’s New Wage Range Transparency Law Took Effect on October 1, 2024
On April 25, 2024, Maryland Governor Wes Moore signed into law House Bill 649, the Wage Range Transparency Act that took effect this past Monday, on October 1, 2024. See Labor & Employment Article, §3-301 et seq., Annotated Code of Maryland. The Act imposes new requirements on all Maryland employers, regardless of size, relating to disclosure of wage information in job postings for applicants and to employees at certain times. The new law expands the requirements under Maryland’s Equal Pay for Equal Work Law, which until now only required employers to disclose the wage range for a position upon the applicant’s request.
Under the new law all employers are required to disclose, in each public or internal posting for each position, the hourly or salary wage or wage range and a general description of benefits and any other compensation offered for the position. If such information was not provided in the posting, the employer must disclose the information to the applicant before any discussion of compensation and at any time upon request of the applicant. The new law defines “employer” as “a person engaged in a business, industry, profession, trade, or other enterprise in the State” and includes the State, counties and municipal governments in the State. Employer also includes “a person who acts directly or indirectly in the interest of another employer with an employee.” A “posting” is defined as “a solicitation intended to recruit applicants for a specific available position, including recruitment done directly by an employer or indirectly through a third party.” The new law defines “wage” as “all compensation for employment” and includes other items such as board, lodging or “other advantage provided to an employee for the convenience of the employer.” “Wage range” means the minimum and maximum hourly rate or salary for a position set in good faith by reference, as applicable, to:
- Any applicable pay scale;
- Any previously determined minimum and maximum hourly rate or salary for the position;
- The minimum and maximum hourly rate or salary of an individual holding a comparable position at the time of the posting; or
- The budgeted amount for the position.
The new law broadly applies to any position for work that will be physically performed, at least in part, in the State. The law requires the Maryland Department of Labor to provide a form for employers to use to ensure compliance with the law and that can be included in each posting.
The new law expressly prohibits any retaliation against applicants and employees, such as refusing to interview, hire, or employ an applicant or to promote or transfer an employee, for requesting a wage or wage range required by the new law. Employers are also now required under the new law to keep a record of compliance with the new pay disclosure requirements for each position for at least 3 years after the position is filled; or if the position is not filled, 3 years from when the position was initially posted.
Recently, the Maryland Department of Labor posted Compliance Assistance materials to help employers comply with the new law on a new web page – https://labor.maryland.gov/labor/wages/. On the web page the Department has provided: FAQs, Narrative Examples, Compensation Disclosure Forms and Compensation Disclosure Form Instructions. If the employer uses the MDOL’s Compensation Disclosure Form, it will be deemed to be in compliance with its posting obligation under the new law. However, an employer is not required to use the form. Pursuant to the assistance materials, the following benefits are required to be listed: employer provided insurance such as health or life or other employer-provided insurance; paid or unpaid time off work such as paid sick or vacation days, or leaves of absence; retirement or savings funds such as 401(k) plans or employer-funded pension plans; or other forms of compensation such as the value of employer-provided meals or lodging. The assistance materials also clarify what “any other compensation offered” should include, such as: overtime, compensatory time, premium pay, tips, commissions, bonuses, stock or stock options, and any portion of service charges. The FAQs do a good job of answering specific questions relating to the new law.
Keep in mind that the Commissioner of Labor and Industry is given the authority under the new law to issue compliance orders for the first violation and fines of $300 “for each employee or applicant for whom the employer is not in compliance,” after the second violation and escalating to a maximum of $600 fine for each subsequent violation that occurs.
If you have any questions regarding this matter, please do not hesitate to contact any member of the Wright, Constable & Skeen Labor & Employment Law Practice Group.