Maryland Employers Get Ready: New Compensation Transparency Laws Will Soon Take Effect

The Maryland Wage Range Transparency Law

Maryland’s Wage Range Transparency Law requires employers to provide, in internal and external job postings, the position’s wage range and a general description of its benefits and other compensation. If an employer doesn’t make the posting available to an applicant, the employer must disclose the required information before discussing compensation with the applicant and at any other time that the applicant requests.

Employers may satisfy their notice obligation by completing a form that Maryland’s Division of Labor and Industry (DLI) will publish and including it with each job posting or otherwise making it available to job applicants.

Under the Transparency Law, a “job posting” is “a solicitation intended to recruit applicants for a specific available position,” whether the employer handles the recruiting directly or through a third party. “Wage” is defined as “all compensation for employment,” including board, lodging, and other advantages provided to an employee for the employer’s convenience. “Wage range” refers to the minimum and maximum hourly rate or minimum or maximum salary that the employer sets in good faith by reference to:

• Any applicable pay scale.
• Any previously determined minimum and maximum hourly rate or minimum or maximum salary for the position.
• The minimum and maximum hourly rate or the minimum and maximum salary of an individual holding the position when posted.
• The position’s budgeted amount.

The notice obligation applies to each job or position for promotion, transfer, or other employment opportunity that will be, at least partially, physically performed in Maryland.

Covered employers must maintain a record of their compliance with the Law for each posting for a job, promotion, transfer, or other opportunity for at least three years after (1) the position is filled or (2) the employer first posted it if the position isn’t filled.

Employers who fall short of their obligations may face:

• For the first violation, a Maryland DLI letter compelling compliance.
• For the second violation, a civil penalty of up to $300 per employee or job applicant for whom the employer failed to comply.
• For later violations, a civil penalty of up to $600 per employee or job applicant for whom the employer failed to comply.

Pay Stub Information Law

Separately, Maryland has amended its Wage Payment and Collection Law to increase the information that employers must include in physical and online pay stubs.

Specifically, employers must include:

• The employer’s name as registered with the state, address, and telephone number.
• The work dates that the payment covers and the pay period’s first and last dates.
• Unless the employee is exempt from overtime under federal and state law, the number of hours that the employee worked during the pay period.
• The employee’s pay rates.
• The gross and net pay that the employee earned during the pay period.
• The amount and name of all deductions.
• A description of the information that the employer used to calculate the employee’s gross and net pay.
• A list of additional bases for the payment, including bonuses, commissions on sales, or other bases.
• For each employee paid by the piece, the applicable piece rates and the number of pieces that the employee completed at each rate.

The DLI will develop, and make available to employers at no charge, a template that employees may use to satisfy their obligations.

If the DLI determines that an employer has violated the disclosure requirements, the DLI may issue an order that:

• Describes the violation.
• Directs the employer to provide the required information.
• Imposes an administrative penalty of up to $500 for each employee who didn’t receive a compliant pay stub.

The Takeaway

The Wage Range Transparency Law and Pay Stub Information Law will go into effect in just a few weeks. To prepare, Maryland employers should update their job postings and pay stub templates to include the information mandated by these laws. Similarly, employers should update their document retention policies to ensure that they retain job posting compliance records for at least three years.

We will continue to monitor this issue and report key developments. If you have questions, please feel free to contact the author or the ArentFox Schiff attorneys who represent you.