Opinions and Legal Insights

Maryland Small Businesses: Are You Ready for the Equal Pay for Equal Work Law Changes?

On May 7, 2020, the 2020 Maryland legislative session officially ended, and Governor Larry Hogan approved a long list of bills that would become law without his signature in accordance with Article II, §17(c) of the Maryland Constitution.1 On May 8, 2020, two bills on that list were enacted, significantly amending Maryland’s Equal Pay for Equal Work Law.2 Both acts take effect soon—October 1, 2020—so, it is imperative that small businesses understand what is required and prohibited in order to ensure they are in compliance and protect themselves from incurring penalties for violations.

Is your business in compliance with the Maryland’s Equal Pay for Equal Work Law?

If you need help, contact us to have a free initial consultation with our legal team.

Enacted House Bill 123 Amendments

With the enactment of House Bill 123, Maryland has aligned itself with the growing number of states making efforts to close the gender wage gap by implementing a requirement for employer provision of a position wage range per request and salary history/inquiry bans.

As the Maryland General Assembly’s 2020 Session Fiscal and Policy Note analysis succinctly provides:

This bill requires an employer to provide, on request by an applicant for employment, the wage range for the position for which the applicant applied. The bill prohibits an employer from seeking wage history information for an applicant, or from screening or considering an applicant for employment or determining an applicant’s wages based on the applicant’s wage history. However, an applicant is not prohibited from voluntarily sharing wage history information with an employer.3

Note that effective October 1, 2020, if an employer makes an initial employment offer “that specifies compensation to an applicant an employer may rely on wage history voluntarily provided by the applicant to support a higher wage.”4 However, employers are only able to rely on an applicant’s volunteered wage history information so long as such reliance does not result in an unlawful pay gap based on sex or gender identity.5

Furthermore, the amendment, once effective, protects applicants by prohibiting an employer from retaliating against or refusing “to interview, hire, or employ an applicant because the applicant did not provide wage history or requested the wage range.”[6] Significantly, an employer’s violation(s) of the new requirement and prohibitions may result in civil penalties for employers.7

Enacted House Bill 14 Amendment

Prior to the the effective date of the enacted House Bill 14 Amendment, employees in Maryland are only protected from employer retaliation for inquiring about other employees’ wages. Remarkably, employees inquiring about their own wages have not benefitted from some retaliatory protection. Once effective, the enactment of House Bill 14 “prohibits an employer from taking any adverse employment action against employees for inquiring about their own wages.”8

Conclusion

In light of these significant amendments aimed at closing the gender wage gap, small businesses in Maryland are urged act quickly to review and, if necessary, alter their job applications accordingly, (and this includes online programs). Remember your employees who are involved with interviewing, hiring, recruitment, or salary negotiation should receive training with these changes in mind. Failure to comply can be costly. We encourage you to consult with an attorney who can help you make the appropriate adjustments, avoid costly penalties and highlight your business’s profile as one that embraces the intent behind the law.

If your business needs help complying to the Maryland’s Equal Pay for Equal Work Law, contact the Frost Law team at 410-497-5947 or fill out our online form.

Footnotes

  1. Governor Hogan’s letter to the Honorable Adrienne A. Jones, Speaker of House of Delegates provides the full list of these bills and may be read at: https://governor.maryland.gov/wp-content/uploads/2020/05/HSE-EWS-Letter.pdf.
  2. Md. Code, Lab. & Empl. §3-301 to §3-309.
  3. The Fiscal and Policy Note, Third Reader-Revised, may be read in full at: http://mgaleg.maryland.gov/2020RS/fnotes/bil_0003/hb0123.pdf. See new Md. Code, Lab. & Empl. §3-304.2.
  4. Id.
  5. Md. Code, Lab. & Empl. §3-304.2(B)(3).
  6. The Fiscal and Policy Note, Third Reader-Revised, may be read in full at: http://mgaleg.maryland.gov/2020RS/fnotes/bil_0003/hb0123.pdf. See new Md. Code, Lab. & Empl. §3-304.2.
  7. See Md. Code, Lab. & Empl. §3-308(E), as amended by HB123.
  8. The Fiscal and Policy Note, Third Reader-Revised, may be read in full at: http://mgaleg.maryland.gov/2020RS/fnotes/bil_0004/hb0014.pdf. See Md. Code, Lab. & Empl. §3-304.1(a)(3)(i), as amended by HB14.

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