On October 1, 2020, numerous laws in Maryland providing expanded protections for both existing employees and job applicants addressing race and sex discrimination, pay equity, and wage transparency went into effect.  As we begin a new year, employers should review these new laws to ensure compliance.

Expansion of Employers’ Notification and Reporting Obligations for Workforce Layoffs

Maryland has instituted its own version of the federal Worker Adjustment and Retraining Notification (“WARN”) Act with the passage of H.B. 1018/S.B. 780. This “mini” WARN Act revises the Economic Stabilization Act (Md. Code Ann., Lab. & Empl. §§ 11-301, 11-302) (“Act”) to require private employers with 50 or more employees to provide advance written notice of a “reduction in operations” to all impacted employees, any union representatives, the Maryland Department of Labor’s Dislocated Worker Unit, and all elected officials representing impacted jurisdictions.  Covered employers must provide such notice at least 60 days before the start of any “reduction in operations,” which includes a decrease in the workforce by “at least 25% or 15 employees, whichever is greater,” over any 3-month period, as well as relocation of part of an employer’s operations to another site.

This new notice requirement is particularly relevant during the COVID-19 pandemic, when many employers have been forced to furlough or layoff portions of their workforce.  Notably, unlike the federal law, the Maryland mini-WARN Act does not include exceptions for unforeseeable business circumstances, natural disaster, or a faltering company.  The mini-WARN Act, however, does not apply to reductions in operations that result solely from labor disputes; occur in a commercial, industrial, or agricultural enterprise operated by the State; occur at construction sites or other temporary workplaces; result from seasonal factors that are determined by the Maryland Department of Labor to be customary in the industry; or result when an employer files for bankruptcy under federal bankruptcy laws.

Expansion of Maryland’s Equal Pay Law

H.B. 123 expands upon Maryland’s preexisting “equal pay for equal work” law to include a retaliation provision that bans employers from taking adverse employment action against an employee who inquires about their wages.  Specifically, an employer may not:

• Prohibit an employee from, or retaliate against them for, inquiring about, discussing, or disclosing their own wages to another employee;
• Prohibit an employee from, or retaliate against them for, asking about or discussing the wages of another employee;
• Prohibit an employee from asking the employer to provide a reason for their wages;
• Require an employee to sign a waiver or any other document that purports to deny the employee the right to disclose or discuss that employee’s wages;
• Retaliate against an employee for discussing another employee’s wages, if those wages have been disclosed voluntarily; or
• Retaliate against an employee for aiding or encouraging another employee’s exercise of rights under the Equal Pay for Equal Work law.

New Wage Ranges and Wage History Requirements, and Salary History Ban

The General Assembly passed H.B. 123 with the public policy aim of closing the gender and racial wage gap among employment applicants.  Upon request, employers are now required to provide job applicants with the wage range associated with the position for which the applicant has applied.  Furthermore, employers are prohibited from refusing to interview, hire, or employ an applicant because they did not provide a wage history or because they requested the wage range associated with the desired position.  Employers are also barred from seeking an applicant’s wage history from a current or former employer and from relying on an applicant’s wage history in considering the applicant for employment or setting compensation for the applicant.

Only after an employer makes an offer of employment that includes an offer of compensation may an employer rely on the wage history voluntarily given by the applicant to support a higher wage than already offered, or seek to confirm the wage history voluntarily offered by the applicant.  Moreover, the employer may rely on wage history to increase an offer of compensation only if the higher wage does not create an unlawful pay differential based on protected characteristics under Maryland’s pay equity law.

New Protections for Hairstyles and Traits Associated with Race

The passage of H.B. 1444/S.B. 531 expands the definition of “race” in Maryland’s Human Relations Title to include “traits associated with race,” specifically encompassing hair texture and “protective hairstyles.”  The law defines a “protective hairstyle” as including “braids, twists, and locks.”

In enacting this law, Maryland joins five other states that have also passed so-called “CROWN” Acts including, California, New York, New Jersey, Colorado, and Virginia.  Twenty-five additional states are in the process of enacting similar legislation.  Driving this movement is the “Crown Coalition,” an alliance of organizations that works to end hair discrimination in the workplace by promoting anti-hair discrimination laws across the United States.

Employers should update their employee handbook’s grooming and personal appearance policies to conform to these new guidelines.

Limits on Using Facial Recognition in the Hiring Process

As we previously reported, under H.B. 1202, Maryland employers are prohibited from using facial recognition services during the hiring process without the applicant’s consent.  The statute vaguely defines “facial recognition service” as “technology that analyzes facial features and is used for recognition or persistent tracking of individuals in still or video images.”  The legislation is specifically concerned with the use of a facial recognition service to create a “facial template,” which is described as a “machine-interpretable pattern of facial features that is extracted from one or more images of an individual.”

Under the law, employers cannot use facial recognition services for the purpose of creating a facial template during an applicant’s interview, unless the applicant consents.  For applicant consent to be valid, employers must obtain a signed waiver, written in “plain language,” that includes the applicant’s name, the date of the interview, a declaration of consent to the use of facial recognition during the interview, and a statement that the applicant read the consent waiver.

This law is particularly relevant to Maryland employers intending to use artificial intelligence (“AI”) powered video interview systems as part of their hiring process.  Maryland employers that intend to use facial recognition technology in job interviews should be prepared to provide adequate notice and obtain written consent from applicants.