The Maryland Department of Labor (“MDOL”) recently issued guidance to address the Maryland Wage Range Transparency law (the “Wage Transparency Act”) and the Pay Stub and Pay Statement law (“Pay Stub Act”) that went into effect October 1, 2024.
Wage Transparency Act
According to the MDOL, employers posting jobs—whether internally or externally—must now include (1) the full pay range, including the minimum and maximum wage, (2) a general description of benefits offered, and (3) any other types of compensation offered. The MDOL also outlined a non-exhaustive list of required benefits to be disclosed and examples of additional compensation.
The Wage Transparency Act applies to jobs where work will physically be performed, at least in part, in Maryland. This includes jobs for remote work where the posting seeks workers based in Maryland. The Wage Transparency Act further applies to all types of job postings, including social media posts, mass emails, newspaper ads, flyers, advertisements, or job listing websites. Notably, this includes postings done on behalf of the employer by third parties, including recruiters. An employer is not required, though, to ensure compliance for job postings that are reposted on third-party websites without the employer’s consent.
The Pay Range
An employer must include the wage range that is accurate at the time of the posting. The wage range may reference an applicable pay scale, previously determined range of wages for the position, the actual range of pay for current employees in comparable positions, or the amount budgeted by the employer for the position. If the employer does not intend to offer a range, the posting must include the fixed rate (e.g., the pay is $30/hour). Employers that post jobs for multiple locations or opportunities at different levels of seniority must provide the pay range for each location or opportunity.
Benefits
The Wage Transparency Act requires a general description of benefits offered by the employer, which may include, for example:
- Employer provided insurance;
- Paid or unpaid time off work, such as sick or vacation leave;
- Retirement or savings funds such as employer-funded pension plans or 401(k) plans; and
- Other forms of compensation (e.g., the value of employer-provided lodging or meals).
Other Compensation
According to the MDOL, “any other compensation offered” is intended to broadly cover any other monetary compensation an employee may receive as payment for work performed, including, but not limited to:
- Overtime;
- Compensatory time;
- Differentials;
- Premium pay;
- Tips;
- Commissions;
- Bonuses;
- Stock or stock options; and
- Service charges.
Impact of the Wage Transparency Act on Employers
Employers must ensure that their job postings, and postings done on their behalf by third parties, comply with Maryland’s Wage Transparency Act. Employers must maintain a record of compliance for each position for at least three years after the position is filled. For violations of the Act, employers may first receive an order compelling compliance from the Commissioner of Labor and Industry. For a second violation, the Commissioner can assess a civil penalty of up to $300 for each applicant for whom the employer is not in compliance. For subsequent violations, the Commissioner may assess a civil penalty of up to $600 for each affected applicant.
Pay Stub Act
Prior to the Pay Stub Act, Maryland required employers to provide notice to employees at the time of hire regarding information related to rate of pay, paydays, and leave benefits. Maryland also required that employers provide a statement each pay period setting forth the gross earnings of the employee and any deductions from those gross earnings.
As of October 1, 2024, employers must provide notice of rates of pay, paydays, and leave benefits in writing at the time of hiring.
Each pay period, employers must provide a written statement of the gross earnings and deductions from those gross earnings on the physical pay stub or online pay statement. If an employee did not work any hours during a pay period, and thus will not receive any wages, the law does not require that the employer provide a pay statement.
The physical pay stub or online pay statement also must include the following:
- The employer’s name registered with the State, address, and telephone number;
- The date of payment;
- The beginning and end dates of the pay period for which the payment was made;
- The number of hours worked during the pay period unless the employee is exempt from overtime;
- All rates of pay;
- Gross and net pay earned during the pay period;
- The amount and name of all deductions;
- A list of additional bases of pay, including bonuses, commissions on sales, or other bases;
- For employees paid at a piece rate, the applicable piece rates of pay and number of pieces completed at each piece rate; and
- Notice of any change in a payday or wage at least one pay period in advance.
An employee cannot waive these requirements.
Impact of the Pay Stub Act on Employers
Employers must ensure that they are providing the required notices to employees at the time of hire and on each payday. If an employer does not comply with the Pay Stub Act, the Commissioner of Labor and Industry may impose a penalty of up to $500 for each employee who does not receive a pay statement, or receives a pay statement that does not comply with the law.
