Seyfarth Synopsis: Maryland Governor Wes Moore has signed into law a bill that will expand Maryland employers' pay transparency obligations. Effective October 1, 2024, employers must disclose in public or internal job postings a good faith wage range and a general description of benefits and other compensation offered for the position. In the absence of a posting, an employer must affirmatively disclose the same information to applicants before discussing compensation and upon the applicant's request. The law also directs the Commission to develop a form that employers may use to comply with the law's disclosure requirements.
As an early adopter of pay transparency, since October 1, 2020, Maryland has required that employers, upon request, provide an applicant for employment the wage range for the position for which the applicant applied. Maryland has now expanded its law to require additional obligations on employers, which will bring Maryland in line with other jurisdictions' more recently passed pay transparency laws which require salary disclosures in job postings. Maryland's new requirements will become effective October 1, 2024.
Under the amended Maryland law, an employer must disclose in each public or internal job posting the wage range and a general description of benefits and any other compensation offered for the position. If a job opportunity is not posted and available to an applicant for the position, the employer is required to disclose to the applicant the same information: (1) before a discussion of compensation is held with the applicant; and (2) at any other time on request of the applicant.
The law specifies that an employer must set the wage range in good faith. While the term "good faith" is not defined, the law's definition of "wage range" provides some clarity into how an employer may set a wage range in good faith. Specifically, the law defines "wage range" as the minimum and maximum hourly rate or minimum and maximum salary for a position, set in good faith by reference, to: (1) any applicable pay scale; (2) any previously determined minimum and maximum hourly rate or minimum and maximum salary for the position; (3) the minimum and maximum hourly rate or minimum and maximum salary of an individual holding a comparable position at the time of the posting; or (4) the budgeted amount for the position.
The law also defines "posting" as a solicitation intended to recruit applicants for a specific available position, including recruitment done directly by an employer or indirectly through a third party. The pay transparency requirements apply to both external and internal job postings.
For Law to Apply, Position Must Be Physically Performed, At Least in Part, in the State
The disclosure requirements will apply only with respect to a position for work that will be physically performed, at least in part, in the State of Maryland.
A prior version of the bill included language, similar to that used in New York State's salary transparency law, which would have made the law applicable with respect to a job, promotion, transfer, or other employment opportunity that would be physically performed outside the State, if the employee would report to a supervisor, office, or other work site physically located in the State. That language has been stricken from the final, enacted version of the bill.
Commissioner Will Develop A Form For Employers
The law also directs the Commissioner to develop and make available to employers a form that an employer may use to comply with the law's disclosure requirements.
In addition, the law specifies that an employer may comply with the disclosure requirements by: (1) completing the form; (2) including the completed form in each public or internal posting for a position; and (3) otherwise making the completed form available to applicants as required. The use of the word "may" in these provisions suggests that an employer will be not required to use the form, but that is not specified in the law or any guidance as of yet.
No Retaliation
The bill also expands the law's anti-retaliation provision to prohibit an employer from retaliating against an applicant or employee for exercising any rights under the law.
Recordkeeping Obligation
The law will also now impose a recordkeeping obligation on employers. Specifically, each employer must keep a record of compliance with the law's disclosure requirements for each position for at least three years after: (1) the position is filled; or (2) if the position is not filled, the position was initially posted.
Potential Penalties
While a prior version of the bill had contemplated a private right of action and potential class claims against employers, the final, enacted law does not include those provisions.
Under the law as enacted, an applicant or employee may make a complaint with Maryland's Commissioner of the Division of Labor and Industry. If the Commissioner determines that an employer has violated the law's disclosure requirements, the Commissioner will issue an order compelling compliance. The Commissioner may also, in his or her discretion: (1) for a first violation, issue a letter to the employer compelling compliance; (2) for a second violation, assess a civil penalty of up to $300 for each employee or applicant for employment for whom the employer is not in compliance; or (3) for each subsequent violation, assess a civil penalty of up to $600 for each employee or applicant for employment for whom the employer is not in compliance if the violation occurred within three years after a previous determination that a violation had occurred.
In determining the amount of the penalty, if assessed, the Commissioner shall consider: (1) the gravity of the violation; (2) the size of the employer's business; (3) the employer's good faith; and (4) the employer's history of violations under the law.
Seyfarth's Pay Equity Group is continuing to monitor this area for additional updates and is available to assist employers with navigating these new requirements and the ongoing trend toward greater pay transparency. For additional information, we encourage you to contact the authors of this article, a member of Seyfarth's Pay Equity Group, or any of Seyfarth's attorneys.
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