The Maryland legislature recently passed several laws that affect pay transparency, family and medical leave, the scope of the State’s antidiscrimination laws, workplace safety, and noncompete agreements. As many of these new laws already have taken effect, now is the time for Maryland employers to take steps to ensure compliance.
Pay Transparency
On October 1, 2024, Maryland joined a host of other states requiring pay transparency in internal and external job postings. The Equal Pay for Equal Work law requires employers to disclose the wage range, defined as the minimum and maximum hourly rate or salary for a position, and general benefits or other compensation for each position. If a job is not posted, employers must still disclose the wage range and other information to the applicant before discussing compensation and upon the applicant’s request. The wage range is to be set in good faith by reference to any applicable pay scale, any previously determined range for the position, the wage range of an individual holding a comparable position at the time of the posting, or the budgeted amount for the position. The law is applicable to all positions that will be performed physically, at least in part, in Maryland.
The Maryland Commissioner of Labor and Industry developed a form for employers’ use to comply with the new requirements. Employers must keep a record of compliance for each position for at least three years after the position is filled, or if the position is not filled, the date the position was initially posted. An employer may not take adverse action against an employee or applicant that exercises their rights under the law. Fines and penalties may be assessed if an employer repeatedly violates the law.
Pay Stubs and Pay Statement Information
As of October 1, 2024, Maryland employers are required to provide written notice to employees at the time of hiring of their: (1) pay rate, (2) regular paydays, and (3) leave benefits. The law also mandates that, each pay period, employers provide employees with a written statement on their physical pay stub or online pay statement that includes:
- The employer’s name registered with the State, address, and phone number;
- Date of payment and the beginning and end dates of the pay period for which the payment is made;
- For non-exempt employees, the number of hours worked during the pay period;
- The rates of pay;
- Gross and net pay earned during the pay period;
- Amount and name of all deductions; and
- List of additional bases of pay, including bonuses, commissions on sales or other bases.
The law sets additional requirements for employees paid for “piece rate” work. Additionally, employers are required to provide employees with at least one pay period’s notice of any change in payday or decrease in wage rate.
Failure to comply with these requirements may subject employers to a penalty of up to $500 per affected employee.
Family and Medical Leave Insurance Program
Maryland employers are gearing up for paid family and medical leave, coming to the State in 2026, with payroll deductions beginning in 2025. The Maryland Time to Care Act, established under the Family and Medical Leave Insurance (FAMLI) Program, applies to all employers who have at least one employee in Maryland, with limited exclusions. While regulations have not yet been issued under the Time to Care Act, the Maryland Department of Labor has released an extensive set of Frequently Asked Questions about the FAMLI Program.
Employees are eligible for this leave if they have worked at least 680 hours in Maryland in the four most recent calendar quarters preceding their leave (approximately 17 weeks for those working 40 hours per week). Under the Time to Care Act, eligible employees may take up to 12 weeks of leave for reasons that largely mirror FMLA-qualifying reasons for leave – to care for or bond with a child, to care for a family member with a serious health condition, for the employee’s own serious health condition, to care for a service member with a serious health condition who is the employee’s next-of-kin, or in the case of a qualifying exigency relating to a family member on active duty. While similar to the FMLA, there are ways in which the Time to Care Act is broader than the FMLA, including the definition of qualifying family members (e.g., grandparents, grandchildren, and siblings).
On October 1, 2024, the Maryland legislature modified the FAMLI Program timeline. Specifically, payroll deductions and/or contributions will begin on July 1, 2025 (delayed from October 1, 2024) and employers will remit the first payment to the State in October 2025. Employees will be eligible to begin receiving benefits on July 1, 2026 (delayed from January 1, 2026).
Employers with 15 or more employees must make employer contributions or establish a self-funded private employer plan to provide paid leave. The contribution rate for employers with 15 or more employees participating in the State plan will be 0.90% of covered wages up to the social security cap. Employers may withhold up to half (0.45%) of the contribution rate from the employees’ pay. Employers with fewer than 15 employees have a contribution rate of 0.45% up to the social security cap and the full amount may be withheld from employees’ pay. Each February, the State will announce a contribution rate for the following fiscal year.
Discrimination
Maryland’s antidiscrimination law now lists sexual orientation and military status among its protected classifications. “Sexual orientation” is defined as the identification of an individual as to male or female homosexuality, heterosexuality, or bisexuality.
In addition, on July 1, 2024, the Maryland General Assembly authorized Maryland employers to grant preference in hiring and promotion to spouses of eligible service members.
Workplace Safety
On September 30, 2024, certain standards regarding heat stress and high heat working conditions went into effect in Maryland. Under this law, if employees could be exposed to a heat index (indoors or outdoors) of 80 degrees Fahrenheit or above, an employer is required to maintain a written heat illness prevention and management plan and follow other requirements of the law, including: (1) providing drinking water to employees; (2) providing shaded areas or alternative cooling and control measures; and (3) encouraging employees to take rest breaks as needed to prevent heat-related illness.
Additionally, when temperatures rise above 90 and 100 degrees, respectively, there may be additional requirements for minimum break periods if an employer is not providing alternative cooling and control measures. Also, supervisors and employees must receive heat stress training annually and following heat-related incidents.
Noncompete Ban for Veterinary and Health Care Professionals
On June 1, 2024, Maryland banned noncompete and conflict of interest provisions in employment contracts for veterinary practitioners or veterinary technicians in the State.
Beginning July 1, 2025, the law will further ban noncompete and conflict-of-interest provisions for employees required to be licensed under the Health Occupations Article (dentists, registered nurses, optometrists, physicians, podiatrists, counselors and therapists, psychologists, and social workers, among others), who are employed in a position that provides direct patient care, and who earn $350,000 or less annually. For covered health care providers earning more than $350,000 annually, noncompete and conflict of interest provisions are permitted, but may not exceed one year from the last day of employment and may not exceed 10 miles in geographic scope.
Importantly, the law does not prohibit restrictive covenants applicable to the taking or using of client lists or other proprietary client-related or patient-related information.
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Maryland’s legislature was active in considering and adopting changes to employment laws in 2024. We expect more activity from the General Assembly in 2025, and will continue to monitor and report on these developments.
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