Fourth Circuit Finds Maryland's Wage Payment and Collection Law Not A Fundamental Public Policy
On December 23, 2011, the U.S. Court of Appeals for the Fourth Circuit in Kunda v. C.R. Bard, Inc. held that employers in Maryland may have their employees execute employment agreements with a choice of law provision other than Maryland, so long as the other jurisdiction has a “substantial relationship” to the parties and the application of the law would not be contrary to a fundamental Maryland public policy. This case settles the issue, at least for now, of whether an employee who works in Maryland has a fundamental right to sue for wages under the Maryland Wage Payment and Collection Law (“MWPCL”) – generally a law favorable to employees.
What Approaching Limitations on Use of Credit Reports Mean for Maryland Employers
In a dramatic change for Maryland employers, the state’s new Job Applicant Fairness Act will significantly limit their use of an individual’s credit history report for hiring and making other employment-related decisions. No previous state restrictions existed on employers’ obtaining and using this information. The Act was signed by the Governor on April 12 and will become effective on October 1, 2011.
What Approaching Limitations on Use of Credit Reports Mean for Maryland Employers
In a dramatic change for Maryland employers, the state’s new Job Applicant Fairness Act will significantly limit their use of an individual’s credit history report for hiring and making other employment-related decisions. No previous state restrictions existed on employers’ obtaining and using this information. The Act was signed by the Governor on April 12 and will become effective on October 1, 2011.
Legislation Roundup: Maryland Law Restricts Use of Applicant's or Employee's Credit Report or Credit History
On April 12, 2011, Maryland's Governor approved the Job Applicant Fairness Act,1 the latest state law to regulate the use of credit history-related information by employers for employment purposes. The Act, which takes take effect on October 1, 2011, applies to all employers with some exceptions outlined below. The new law restricts the use of credit reports and credit history information by covered employers unless certain specified conditions are satisfied. Civil penalties may be assessed by the Commissioner of Labor and Industry. Four other states have enacted similar laws: Hawaii, Washington, Oregon, and Illinois.
Breaks Required under Maryland’s “Healthy Retail Employee Act,” Effective March 1
Under Maryland’s Healthy Retail Employee Act, Maryland employers who operate “retail establishments” must provide non-exempt retail employees with break periods based on the length of the shifts the employees work. Employers in violation of the Act will face a fine.
Maryland Enacts "The Healthy Retail Employee Act" and Amends Its Wage Payment and Collection Law.
Effective March 1, 2011, retailers who conduct business in Maryland must provide their employees with mandatory shift breaks or be subject to substantial fines of up to $300 per employee for a first offense. The Healthy Retail Employee Act (the "Act"), was signed into law by Governor Martin O'Malley on May 20, 2010. The Act applies to retail establishments with 50 or more retail employees. For purposes of the Act, a retail establishment is defined as a "place or business with the primary purpose of selling goods to a consumer who is present at the place of business at the time of sale." Notably, the Act is similar to the shift break bill the Maryland General Assembly unsuccessfully attempted to enact last year, which would have targeted most employers with 50 or more employees, regardless of the industry. As such, it appears likely that the General Assembly will attempt to expand the reach of the Act in the future.
Maryland Bill Would Expand Employee Leave Entitlements.
Maryland employers could soon be required to allow employees to take up to 12 weeks of unpaid, job-protected leave in order to care for the employees siblings, grandparents, grandchildren, domestic partners, or children of domestic partners. The Maryland Family and Medical Leave Act, introduced in the General Assembly by Delegate Heather Miziur (D-Montgomery County) on February 2, 2010, would require employers in Maryland to provide employees job-protected leave to care for these individuals on the same basis as leave is provided for a spouse, parent, son or daughter under the federal Family and Medical Leave Act of 1993 (FMLA). The bill is scheduled for a hearing on March 18, 2010.
Independent Contractors Targeted by Maryland Enforcement Efforts.
On August 28, 2009, the Maryland Department of Labor, Licensing, and Regulation (DLLR) published its proposed regulations to implement the recently enacted Workplace Fraud Act of 2009 (the Act), which takes effect on October 1, 2009. While the Act and regulations currently affect primarily those employers in the construction and landscape industries, all Maryland employers should pay close attention because all employers are covered under the law for unemployment insurance (UI) purposes. The state's UI division investigates employee classification through both random and targeted audits and when a person claims UI benefits but is not listed as a covered employee. In addition, Governor Martin O'Malley has made it very clear that he hopes to target other industries as soon as possible. To further this goal, the governor has recently issued an Executive Order to create a task force to begin targeting employers in other industries that purportedly regularly misclassify employees as independent contractors.
Amendments to Maryland Flexible Leave Act Take Effect Immediately.
Under the Maryland Flexible Leave Act, employers with 15 or more employees must allow workers to use paid leave for the illness of an immediate family member. The law does not require employers to provide paid leave, only that employees be permitted to use any paid leave they have earned under their employers policies. The MFLA does not affect employer policies regarding how leave accrues, how often or how much, who is eligible, or the waiting periods for accrual of leave. New legislation, taking effect immediately, defines and clarifies several key terms and provisions in the MFLA.
Maryland Enacts Law Targeting Employers Who Misclassify Workers as Independent Contractors.
The Maryland Workplace Fraud Act of 2009 is intended to prevent employers in the construction and landscaping services industries from misclassifying workers as independent contractors rather than employees to avoid certain payroll and related costs (such as unemployment taxes and workers compensation premiums). In addition to establishing standards for determining whether an employer-employee relationship exists, the Act grants Marylands Commissioner of Labor and Industry broad investigatory and enforcement powers.
