Almost thirty years ago, Maryland’s General Assembly passed the Equal Pay for Equal Work Act (Act), imposing an obligation on Maryland employers to pay employees equal amounts for the same work, regardless of the employee’s sex. Effective October 1, 2020, the General Assembly amended the Act, imposing new restrictions on employers both during and after the hiring process. Companies employing workers in Maryland should review and adjust their interviewing and hiring policies to comply with the new law and avoid potential regulatory penalties and costly litigation.
In an effort to expand protections for employees and prospective employees, particularly women and minorities who historically have been offered lower wages than white males, the amended Act imposes a number of pre-hire obligations on employers. First, the amendments require employers to provide an applicant, on request, with the wage range for the position for which the applicant applied. Second, the statute now prohibits employers from requesting an applicant’s wage history during the application and hiring process. The restriction specifically prevents a prospective employer from requesting an applicant’s wage history orally or in writing, directly or indirectly, including from recruiters or job placement professionals, or from the employee’s current or former employers. In the event a prospective employer ultimately obtains a wage history for the applicant, either through the employee’s voluntary submission of the same or by violation of the statute, the employer is prohibited from relying on that wage history in screening the applicant for employment or setting the applicant’s wages or salary.
Once an employer makes an initial employment offer, the employer may consider an applicant’s wage history voluntarily provided by the employee, but only for the purpose of increasing the employee’s salary or wages from what was initially offered.
The amendments also include an anti-retaliation provision. Specifically, employers may not “retaliate against or refuse to interview, hire, or employ an applicant for employment” because that applicant requested a wage range for the position sought or declined to provide a wage history.
If an employer violates the statute, the Maryland Department of Labor, Licensing, and Regulation may issue an order forcing the employer to comply with the statute and, on subsequent violations, assess civil penalties. In addition to these administrative remedies, the statute also provides an employee or prospective employee with an independent cause of action. The employee may seek injunctive relief, double damages, and attorneys’ fees and costs on behalf of herself or as a class action.
Importantly, the implications of these new amendments likely reach employers well beyond the boundaries of Maryland. Maryland courts have repeatedly held that Maryland employment laws not only apply to individuals working in Maryland for Maryland-based businesses on a daily basis, but also employees who may live or work primarily outside the state but who travel to Maryland from time to time as part of their employment. In the COVID-19 age, the laws likely also apply to companies that do no actual work in Maryland but employ individuals who live in Maryland and who are permitted to work from home.
In order to avoid the pitfalls of the Act’s amendments, companies should review and update their hiring practices to comply with the Act.
- Update Application Forms: Many form job applications include requests for disclosure of salary and pay history. Companies should review their form application materials and remove any request for salary or pay history.
- Train Interviewers: It is a common practice for an interviewer to request an applicant’s salary history from a recruiter or during an applicant’s interview. Companies should train and retrain their interviewers to ensure that they are aware of the new restrictions imposed by the Act.
- Maintain Documentation: Perhaps most importantly, companies should maintain detailed records of employee titles, job descriptions, and compensation levels so that, if the information is requested by an applicant, the company is able to disclose the information accurately in compliance with the Act.
If a company implements these practices, they will be in an excellent position to avoid liability for damages, attorneys’ fees, and potential regulatory penalties imposed by the Act.
If you have questions regarding the implications of the new restrictions for your company, please contact Matt Feinberg, the author of this blog, or a member of PilieroMazza’s Litigation & Dispute Resolution Group.
