Executive Summary: On August 13, 2014, the Maryland Court of Appeals held in Peters v. Early Healthcare Giver, Inc. that unpaid overtime wages are recoverable under the Maryland Wage Payment and Collection Law (MWPCL or “Wage Payment Act”). The ruling increases the potential liability for Maryland employers who misclassify their employees as exempt under the Maryland Wage and Hour Law (MWHL) and the federal Fair Labor Standards Act (FLSA). Employees who prove an entitlement to overtime pay can now seek an award of treble damages or three times the amount owed to them in unpaid overtime wages. Although an employer can avoid a treble damages award by proving that there was a good faith “bona fide dispute” over the validity of the employee’s overtime claim, the court in Peters held that the employer has the burden of proof on the “bona fide dispute” issue.
Articles About Maryland Labor and Employment Law.
Maryland Employers Can Be Liable for up to Treble Damages for Misclassification “Overtime Pay” Claims Under State Law
On August 13, 2014, the Maryland Court of Appeals held in Peters v. Early Healthcare Giver, Inc. that employers can be held liable under the Maryland Wage Payment and Collection Law (“Wage Payment Law” or MWPCL) for all overtime violations, including allegations of misclassification under the Fair Labor Standards Act (FLSA) and the Maryland Wage and Hour Law (MW&HL). This holding by the state’s highest court is a clear departure from current law. Accordingly, this decision has significant ramifications for Maryland businesses because: (1) it increases potential liability in that the law allows employees to receive up to treble damages, assuming no “bona fide dispute” exists; and (2) the court held that the burden of proving a “bona fide dispute” falls on the employer, and not the employee. On the other hand, the court held also that an award of up to treble damages does not mean an aggrieved employee receives the principal unpaid wages plus three times that amount, and that a fact-finder is not required to award enhanced damages, even in the absence of good faith.
Parental Leave Act Strengthens Maryland Employee Leave Protections
Effective October 1, 2014, small employers in Maryland will be required to provide employees with unpaid leave for the birth or adoption of a child under the Maryland Parental Leave Act (“PLA” or “Act”), a new law passed by the Maryland General Assembly.
Baltimore Enacts ‘Ban the Box’ Law, Restricts Private Employers’ Inquiries into Applicants’ Criminal Backgrounds
The Baltimore City Council has enacted the “Ban the Box Fair Criminal Record Screening Practices” Ordinance, which restricts the timing of pre-employment inquiries about a job applicant’s criminal history by certain private employers. The Ordinance will become effective August 13, 2014, 90 days after Mayor Stephanie Rawlings-Blake signed it into law.
Baltimore Becomes the 10th Jurisdiction To “Ban The Box”
On May 15, 2014, the City of Baltimore, Maryland, became the tenth U.S. jurisdiction to “ban the box” by passing legislation restricting private employers from inquiring into the criminal history of job applicants.
Maryland to Ban Discrimination on Basis of Gender Identity
The Maryland House of Delegates has approved a bill banning discrimination on the basis of gender identity, positioning Maryland to join 17 other states, the District of Columbia, and Puerto Rico in providing protections from unlawful discrimination to employees based on gender identity. The anti-discrimination laws of certain localities in Maryland (i.e., Baltimore City, Baltimore County, Howard County, and Montgomery County) already prohibit discrimination on the basis of gender identity.
Court Finds Maryland Drug and Alcohol Testing Law Prohibits Breath Alcohol Testing
In late September, a federal court in Maryland ruled that the state drug and alcohol testing statute does not permit employers to conduct breath alcohol tests.
Maryland Employers to Provide Pregnant Workers with Accommodation under New Law
Maryland Governor Martin O’Malley has signed into law the Reasonable Accommodations for Disabilities Due to Pregnancy Law. The law, which becomes effective on October 1, 2013, amends the Maryland Fair Employment Practices Act and creates new burdens for employers beyond those required under federal law. Maryland joins a growing number of states that mandate employers provide some form of accommodation to pregnant workers. (E.g., see California Issues Amended Pregnancy Regulations, Extends Coverage to Perceived Pregnancy.) Significantly, as illustrated by the new Maryland law, these state laws impose different and arguably greater obligations than such federal laws as the Pregnancy Discrimination Act (“PDA”) and the Americans with Disabilities Act (“ADA”), even after passage of the ADA Amendments Act (“ADAAA”).
Maryland Employers Soon Must Provide “Light Duty” to Pregnant Disabled Women and Update Employment Handbooks
Effective October 1, 2013, Maryland employers with 15 or more employees must provide their pregnant employees with certain reasonable accommodations beyond the requirements of the federal Americans with Disabilities Act (ADA) and Pregnancy Discrimination Act (PDA). The Reasonable Accommodations for Disabilities Due to Pregnancy Act (SB 784/HB 804) mandates that employers provide pregnant employees who are temporarily disabled with light duty assignments or transfers to less strenuous jobs, among other potential accommodations. Typically, these accommodations remove essential functions from a job, in contrast to traditional ADA accommodations which remove impediments or otherwise assist employees in performing the essential functions of their jobs.
Maryland Enacts Leave Law for Family of Armed Service Members
Effective October 1, 2013, Maryland employers must provide employees with one day of unpaid leave to be used on the day the employee’s “immediate family member” is leaving for or returning from active military duty outside the United States as a member of the armed forces. “Immediate family member” is defined as the employee’s spouse (including a same-sex spouse), parent, stepparent, child, stepchild or sibling.
Legislation Roundup: Maryland General Assembly Mandates that Employers Provide “Light Duty” to Pregnant Disabled Women, Leave for Military Family Members, and Creates a New Wage Law
In May 2013, Governor Martin O’Malley signed three noteworthy statutes that will affect virtually every Maryland employer. Effective October 1, 2013, Maryland employers with 15 or more employees must provide their pregnant employees with certain reasonable accommodations beyond the requirements of the Americans with Disabilities Act (“ADA”) and the Pregnancy Discrimination Act (“PDA”). The “Reasonable Accommodations for Disabilities Due to Pregnancy Act” (SB 784/HB 804) mandates that employers provide pregnant employees who are temporarily disabled with light duty assignments or transfers to less strenuous jobs, among other accommodations. Typically, these accommodations remove essential functions from a position, rather than allowing the employee to perform the essential functions. The law also requires that employers post a notice “in a conspicuous location” and devote a section in employee handbooks that explains a pregnant employee’s right to a reasonable accommodation under the new law.
Fourth Circuit Reverses Decision Holding Employer’s Promise Not to Retaliate Modified At-Will Employment, Rejects Breach of Contract Claim
On November 27, 2012, in Scott v. Merck & Company, Inc.,1 the U.S. Court of Appeals for the Fourth Circuit reversed a jury verdict of more than $500,000 in favor of Jennifer Scott, a former Merck & Co., Inc. employee. The appeals court concluded that the trial court erred in permitting Scott to argue that the company’s non-retaliation policy included an enforceable promise not to terminate her employment. Specifically, the appeals court ruled that Scott could not reasonably have believed that the non-retaliation policy included a promise of continued employment, given the express at-will disclaimers contained in the employee handbook in which the non-retaliation policy appeared.
2012 Maryland Legislative Round-Up
The 430th legislative session of the Maryland General Assembly resulted in several new laws and amendments to existing laws that affect employers. We summarize the more noteworthy legislation in this article. All laws are effective October 1, 2012, unless otherwise noted.
Maryland “Facebook Law” Raises New Obstacles for Employers and Other Significant Maryland Developments
Maryland has become the first state to pass a bill, the User Name and Password Privacy Protection Act (SB 433/HB 964) (the “Act”), that bans employers from asking employees and applicants for social media passwords and login information. Specifically, the bill would prohibit an employer from taking or threatening any form of adverse action based on an employee’s or applicant’s refusal to provide a user name or password to a personal account accessed through a communications device. Governor Martin O’Malley likely will sign the bill into law in May 2012.
Maryland to Ban Employers from Asking Employees, Applicants for Social Media Passwords
Under a bill passed by both houses of the Maryland General Assembly, employers in Maryland would be prohibited from demanding from employees and job applicants the usernames, passwords or other means to access personal accounts or service through an electronic communication device (e.g., computer and phone) for social media sites such as Facebook and LinkedIn. The bill, S.B. 433, introduced by Senator Ronald Young, passed unanimously in the Senate and by a vote of 128-10 in the House. It is awaiting the signature of Governor Martin O’Malley. It would become effective October 1, 2012.