Maryland Employment Law 2014 Legislative Wrap-Up

April 23, 2014

While the Maryland General Assembly enacted many bills during the 2014 legislative session, the following are some of the more important developments for Maryland employers.

Maryland Minimum Wage Act of 2014

Md. Code Ann., Lab. & Empl. § 3-401 et seq.

Arguably the most significant development in employment law from this legislative session is the increase to the state minimum wage starting Jan. 1, 2015, eventually reaching $10.10 per hour by July 1, 2018. The increase occurs in five steps over the next four years as follows:

  • $8.00 per hour, effective Jan. 1, 2015
  • $8.25 per hour, effective July 1, 2015
  • $8.75 per hour, effective July 1, 2016
  • $9.25 per hour, effective July 1, 2017
  • $10.10 per hour, effective July 1, 2018

In addition to minimum wage increases, the Act limits the credit against the minimum wage for employees who customarily and regularly receive tips to $3.63 per hour, regardless of the minimum wage. The Act also permits employers to pay a training wage of 85 percent of the state minimum wage for employees under the age of 20 for the first six months of employment and a reduced minimum wage for employees who work for seasonal amusement or recreational establishments, such as swimming pools. Further, the Act eliminates some of the exemptions from the minimum wage and overtime requirements.

The Act also increases the penalty against employers for violating the Maryland Wage and Hour Law. Under the law as currently written, an employee may bring an action to recover the difference between the wage actually paid to the employee and the amount required under the law, and a court may award reasonable attorneys’ fees and costs to a successful employee. Effective July 1, 2014, awards for reasonable attorneys’ fees and costs are mandatory (if a claim is successful), as are liquidated damages in an amount equal to the difference between the wage actually paid to the employee and the amount required by law. However, if an employer shows that it acted in good faith and reasonably believed that the wages paid were not less than required, the court can award less or no liquidated damages.

Relatedly, the General Assembly granted the Maryland Commissioner of Labor and Industry the authority to enforce local minimum wage laws. This is important because both Montgomery and Prince George’s counties have passed laws increasing the minimum wage in those counties to $8.40 effective Oct. 1, 2014, $9.55 effective Oct. 1, 2015, $10.75 effective Oct. 1, 2016, and $11.50 effective Oct. 1, 2017. For tipped employees, Prince George’s County’s law follows Maryland law, but the Montgomery County law limits the credit to 50 percent of the minimum wage.

Fairness for All Marylanders Act of 2014

Md. Code Ann., State Gov’t § 20-101 et seq.

The Fairness for All Marylanders Act adds gender identity to the list of categories protected against discrimination under the Maryland Human Relations Act, which covers places of public accommodations, employment and housing. Gender identity is defined as “gender-related identity, appearance, expression, or behavior of a person, regardless of the person’s assigned sex at birth, which may be demonstrated by: (1) consistent and uniform assertion of a person’s gender identity; or (2) any other evidence that the gender identity is sincerely held as a part of the person’s core identity.”

The Act permits employers to establish reasonable workplace appearance, grooming and dress standards that are directly related to the nature of the employment, as long as employees are allowed to appear, groom and dress consistent with their gender identity. The Act, however, provides an exception for employment by religious institutions with respect to the performance of work connected with the activities of the religious entity.

As for public accommodations, the Act provides that the prohibition of discrimination on the basis of gender identity does not apply to private spaces at a public facility (such as a restroom or changing room) as long as an equivalent private space is made available for the use of persons whose gender identity is different from their assigned sex at birth.

The Act is effective Oct. 1, 2014.

The Maryland Parental Leave Act

Md. Code Ann., Lab. & Empl. § 3-1201 et seq.

The Maryland Parental Leave Act is similar to the federal Family and Medical Leave Act (FMLA) except that it (a) covers certain employers that are too small to be covered by the FMLA, and (b) applies only to family leave, not medical leave. Specifically, the Act guarantees eligible employees six workweeks of unpaid parental leave during any 12-month period for the birth of the employee’s child or the placement of a child with the employee for adoption or foster care.

The Act applies to employers that employ at least 15 but not more than 49 employees in Maryland. In order to be eligible for the parental leave, the employee must have been employed by the employer for at least a 12-month period and have worked 1,250 hours during the previous 12 months. In addition, the employee must be employed at a work site at which at least 15 employees work within a 75-mile radius.

As a general matter, employees must give at least 30 days notice of the need for parental leave, though no notice is required is the case of a premature birth or an unexpected adoption or placement for foster care. An employer may deny parental leave only if the denial is necessary to prevent “substantial and grievous economic injury” to its operations, as long as it notifies the employee of the denial before the leave begins.

Any paid leave provided by the employer may be substituted for the unpaid parental leave at either the employer’s or the employee’s option. Employees taking parental leave must be maintained under the employer’s group health plan for the duration of the leave. However, as under the FMLA, if the employee fails to return from leave, the employer may recover the premiums paid on behalf of the employee.

After the parental leave, the employee must be returned to his or her previous position or to an equivalent job. Restoration may be denied only if: (1) the denial is necessary to prevent substantial and grievous economic injury to the operations of the employer; (2) the employer notifies the employee of the intent to deny restoration at the time it determines that such economic injury would occur; and (3) in the event the parental leave has already begun, the employee elects not to return to employment after receiving such notice. In addition, during the parental leave period, an eligible employee may be terminated only for cause.

The Act requires the Maryland Commissioner of Labor and Industry to adopt regulations implementing the Act. The Act also authorizes the commissioner to investigate whether the Act has been violated and to bring an action on behalf of affected employees. Employees, in turn, have a right to bring a private cause of action against an employer for violations of the Act. In such an action, the employee may recover damages equal to the amount of wages, salary, employment benefits or compensation denied or lost. If an employee is successful, the court must allow reasonable attorneys’ fees and costs against the employer. Finally, the Act prohibits retaliation against an employee for exercising his or her rights under the Act or for making a complaint or participating in a proceeding related to the Act.

The Act is effective Oct. 1, 2014.

For questions regarding the new Maryland statutes or if you need assistance in reviewing, revising or implementing related employee information disclosures, forms and policies, please contact the authors or any other members of the McGuireWoods labor and employment group.