On October 1, Maryland’s House Bill 649 will come into effect, broadening pay transparency obligations for employers in the state. This law applies to all businesses, industries, professions, trades, or enterprises operating in Maryland, irrespective of their size. It builds upon the existing Equal Pay for Equal Work Act, which mandates that employers must provide wage ranges to job applicants if requested.
Key Requirements of the New Law
The key requirements of the new law: expanded wage history protections, disclosure requirements, recordkeeping, enforcement and penalties.
- 1st violation: A letter to the employer.
- 2nd violation: A civil penalty of up to $300 for each employee/applicant that the employer wasn’t in compliance.
- 3rd or more violations: A civil penalty of up to $600 for each employee/applicant.
Maryland’s new House Bill 649, represents a significant step toward addressing wage disparities and promoting fairness in the workplace. This legislation aims to ensure that employees are compensated equally for performing the same or substantially similar work, though the new requirements are unclear.
New Disclosure Requirements Create Uncertainty
For instance, recent disclosure regulations in the bill require employers to reveal a wage range along with a general overview of benefits and “any other compensation offered for the position” in all public or internal job postings. These requirements are applicable to all roles that will be “physically performed at least in part in the state.” However, the state has not yet issued guidance on the law, including how to interpret this stipulation. Consequently, it is currently uncertain whether the law applies to employers outside of Maryland who have remote workers in the state, or if it encompasses positions based in other states that may involve occasional remote work in Maryland. Additionally, it remains unclear what other types of compensation may be included under the broad requirement of “any other compensation,” which could potentially cover bonuses or equity.
Equal Pay for Comparable Work: Ensuring Fair Compensation
Here are the key provisions of the Equal Pay for Equal Work Act.
1. Equal Pay for Comparable Work
Employers are required to provide equal pay for employees who perform comparable work, which is defined as work that requires substantially similar skill, effort, and responsibility, and is performed under similar working conditions.
2. Prohibition of Wage Discrimination
The law prohibits wage discrimination based on gender or any other protected characteristic. Employers cannot pay employees less for comparable work based on these factors.
3. Transparency in Pay Practices
Employers must be transparent about their pay practices. This includes providing employees with information about how their wages are determined and ensuring that pay scales are clear and accessible.
4. Protection Against Retaliation
Employees who inquire about, discuss, or disclose their wages or those of their colleagues are protected from retaliation. This encourages open dialogue about pay and helps identify and address wage disparities.
5. Enforcement and Penalties
The law includes provisions for enforcement, allowing employees to file complaints with the appropriate state agencies if they believe their rights under the act have been violated. Employers found in violation of the law may face penalties, including fines and other corrective actions.
6. Record-Keeping Requirements
Employers are required to maintain records of wages and other employment conditions to ensure compliance with the law and facilitate enforcement.
The Equal Pay for Equal Work Act is a crucial step toward achieving wage equity in Maryland. But this new HB has caused confusion among employers in the state.
