ARTICLE
6 June 2024
Maryland joins the growing list of states that have enacted wage transparency legislation. Effective October 1, 2024, employers will be required to publish wage ranges and other compensation information for all job.
United States Employment and HR
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Maryland joins the growing list of states that have enacted wagetransparency legislation. Effective October 1, 2024, employers willbe required to publish wage ranges and other compensationinformation for all job postings in Maryland. This expands onMaryland's existing requirement that employers provide anapplicant with a wage range for the position for which theapplicant applied upon request.
Maryland's new wage transparency law broadly defines"employer" to include all persons and entities engaged ina business, industry, trade, profession, or other enterprise in thestate. It also includes those who act directly or indirectly in theinterest of another employer with an employee. The law applies toall job postings for positions that will be physically performed atleast in part in Maryland.
In addition, Maryland will require employee pay stubs and wagestatements to contain certain information relating to their pay,deductions and hours of work.
What is Required?
To comply with the law, employers must disclose in public orinternal job postings for each position a good faith wage range anda general description of benefits and other compensation offeredfor the position. If an employer does not make this informationavailable in a job posting, it must disclose to the applicant theinformation before the employer discussescompensation with the applicant and atany other time on request of the applicant.
The law directs the Maryland Commissioner of Labor and Industryto develop a form that employers may use to comply with thedisclosure requirements. If an employer chooses to use the form,the employer must include the completed form in each public orinternal posting for a position and otherwise make the formavailable to applicants.
Employers must keep a record of their compliance with the wagetransparency law for each position for atleast three years after the position is filled. If the position isnot filled, the employer must keep a record of its compliance forthree years after the position was initially posted.
What is a "Posting?"
A "posting" is any solicitation intended to recruitapplicants for a specific available position, including recruitingdone directly by an employer or indirectly through a third party.The requirements apply to both external and internal jobpostings.
What is a "Wage Range?"
The law defines a "wage range" as the minimum andmaximum hourly rate or minimum and maximum salary for a position,set in good faith by the employer. A good faith wage range isestablished by reference to:
- any applicable pay scale;
- any previously determined minimum and maximum hourly rate orminimum and maximum salary for the position;
- the minimum and maximum hourly rate or minimum and maximumsalary of an individual holding a comparable position at the timeof the posting; or
- the budgeted amount for the position.
Enforcement and Penalties for Noncompliance
The law prohibits employers from retaliating against applicantsand employees for exercising any rights under the new law.
However, the law does not create a private right of action foremployees and applicants for employer noncompliance. Instead,employees and applicants may file a complaint with the Commissionerof the Division of Labor and Industry. If the Commissionerdetermines that an employer has violated the wage disclosurerequirements, the Commissioner will issue an order compelling theemployer's compliance. The Commissioner may also, in theirdiscretion:
- For a first violation, issue a letter to the employercompelling compliance
- For a second violation, impose a civil penalty of up to$300 for each employee orapplicant for whom the employer is not in compliance;or
- For each subsequent violation, impose a civil penalty of up to$600 for each employee or applicant for whom theemployer is not in compliance if the violation occurred withinthree years after a previous determination that a violationoccurred.
In determining the amount of penalty, the Commissioner considersthe gravity of the violation, the size of the employer'sbusiness, the employer's good faith, and the employer'shistory of violations under the law.
New Pay Stub Requirements
Beginning October 1, 2024, pay stubs and wage statements forMaryland employees must include the following information for eachpay period: (1) employer's name (as registered with the Stateof Maryland), address, and phone number; (2) date of payment andbeginning and end dates of the pay period; (3) total number ofhours worked during the pay period (for non-exempt employees); (4)rate of pay; (5) gross and net pay for the pay period; (6) amountand name of any deductions; (7) a listing of any additional pay inthe paycheck (such as commissions, bonuses, etc.); and (8), foremployees paid a piece rate, the applicable piece rate and numberof pieces completed. The Commissioner will develop a template thatemployers may use.
Employers who fail to comply with the pay stub requirements maybe ordered to pay administrative penalties of up to $500 peremployee who did not receive the required information.
Maryland employers should begin to review their internal andexternal job postings to ensure that they will meet the law'sposting requirements. They also should review their payrollprocesses to ensure that employee pay stubs contain the requiredinformation. Contact your Vorys attorney with questions related toMaryland's wage transparency law or similar laws in otherjurisdictions.
The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circ*mstances.
