Effective October 1, 2024, Maryland will join a growing list of states in promoting wage transparency in the workplace. The Maryland Wage Transparency Law (SB 525/HB 649) requires employers, both public and private, to publish wage ranges, a “general description of benefits,” and “any other compensation” in all internal and external job postings. This new law builds on previous pay transparency legislation that requires disclosure of a wage range upon request and prevents employers from requesting applicant and employee wage history.
Applicability
The law applies to positions that are physically performed, at least in part, in Maryland. It remains to be seen how “in part” will be defined, given the prevalence of remote and hybrid work. The Maryland Department of Labor is expected to issue guidance that may help clarify the new law.
Definition of “Wage Range”
Under the new law, “wage range” means “the minimum and maximum hourly or salary wage for a position.” An employer, in good faith, must determine the wage range, based on:
- Any pay scale;
- Any previously determined minimum and maximum hourly or salary wage for the position;
- Minimum and maximum hourly or salary wage of current employees holding equivalent positions at the time of the posting; or
- The budgeted amount for the position.
Disclosure Requirements, Timing
Employers must disclose the wage range in any public or internal job postings. Along with the wage range, the posting must include a general description of the position, benefits, and any other compensation offered for the position. If a job posting was not made available to an applicant for the position, the employer must disclose to the applicant the required information before holding compensation discussions with the applicant and at any other time upon the applicant’s request.
Record-Keeping Requirements
Employers must maintain records of wages, job classifications, and other employment conditions for three years after a position is filled or the job posting is made if the position remains unfilled.
Enforcement, Penalties
Unlike the California and Washington state transparency laws, Maryland’s law does not create a private right of action for employees or job applicants. Instead, Maryland’s labor commissioner is tasked with enforcement of the new law. The commissioner has discretionary authority to enforce various penalties for violating the wage transparency requirements including:
- First Violation: The commissioner may issue a compliance letter to the employer, demanding adherence to the law.
- Second Violation: The employer may be assessed a civil penalty of up to $300 for each employee or applicant affected by the non-compliance.
- Subsequent Violations: If further violations occur within three years of a previous violation, the employer may face a civil penalty of up to $600 for each employee or applicant affected.
When determining what penalty to issue, the commissioner will consider factors like the gravity of the violation, the size of the business, the employer’s good faith, and prior violations.
Ensuring Compliance With Maryland’s Wage Transparency Law
To ensure compliance with Maryland’s new Wage Transparency Law, employers should take proactive steps. Here are a few recommendations:
- Review compensation and related policies and practices: Proactively review compensation to ensure internal equity and that wage rates are set consistently and equitably.
- Review and Update Policies: Regularly review job posting and hiring practices to ensure they align with the requirements of the new law.
- Educate Your Team: Conduct training sessions for HR personnel and hiring managers about the implications of the law and the importance of wage range disclosure.
- Implement Systematic Changes: Adjust your HR systems to automatically include wage range information in job postings and internal notifications.
- Keep Detailed Records: Maintain thorough records of wages, job classifications, and other relevant employment data to comply with the law’s three-year record-keeping requirement.
Ashley Woozley, law clerk, assisted with preparing this post.
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