US Regional Employment 2023 Comparisons

Maryland is a progressive state and has enacted legislation in response to current social movements. Even before the #MeToo movement gained traction, Maryland bolstered its Equal Pay Act by adding a pay transparency provision and protections on the basis of gender identity. More recently, it also vastly expanded the protections against sexual and other harassment (by, for example, lowering the standard for establishing illegal harassment), instituted a salary history ban, and implemented a gender diversity reporting requirement on certain corporate boards.

The Maryland General Assembly has also generally strengthened discrimination protections in recent years. It has extended the time period for filing complaints of discrimination with the Maryland Commission on Civil Rights, which is the state agency charged with enforcing the state anti-discrimination law. It also broadly expanded the filing period for discrimination and harassment lawsuits under state law by tolling (ie, putting on hold) the applicable two- or three-year suit-filing period while an administrative complaint is pending – a period that can range widely from only a couple of months to several years.

There are no federal or Maryland laws applicable to private employers that protect employees on the basis of their political affiliation or belief. It is worth noting, however, that certain protected characteristics – such as race, religion, or gender (including sexual orientation, gender identity, and transgender status) – may be closely associated with particular political parties. Title VII and Maryland’s anti-discrimination law protects employees against discrimination on those grounds and may require reasonable accommodation for religious beliefs. To the extent that political discourse may become disruptive in the workplace, however, Maryland employers may choose to prohibit such discussions.

Given the uncertain economy, as well as forthcoming state laws to increase the minimum wage and implement paid family leave benefits, which will increase staffing costs for Maryland businesses, some employers are facing the possibility of layoffs or reductions in force. Such activities must be handled carefully, as poor planning and execution can lead to claims of discrimination – in terms of adverse impact claims for groups on the basis of age, race, or gender, as well as individualized discrimination claims – under both federal and Maryland law.

If the layoffs impact a significant number of employees, Maryland employers must also ensure compliance with the federal Worker Adjustment and Retraining Notification (WARN) Act; the analogous state law is still voluntary at this time. In addition, if employers offer severance in connection with a release of claims, they must be certain to meet various legal requirements set forth by federal workforce agencies like the Equal Employment Opportunity Commission and the National Labor Relations Board (Maryland does not have specific severance agreement requirements).

As a strongly Democratic state, Maryland is friendly to unions. The union–employer relationship in Maryland is generally governed by the federal National Labor Relations Act. The National Labor Relations Board has been aggressive in expanding worker protections, which apply to both union and non-union workplaces. Under the Biden administration, some of the major steps it has taken include:

• restricting the use of confidentiality and non-disparagement provisions in severance agreements;
• reinstating an employee-friendly standard for reviewing whether standard workplace policies are unlawful;
• imposing an independent contractor standard that favors findings of employee status;
• requiring employers to permit the display of union insignia on employee apparel absent limited “special circumstances”;
• allowing bargaining by “micro units” of employees;
• focusing on the use of automated technologies and electronic management systems as possibly violating the National Labor Relations Act; and
• reinstating a worker-friendly standard for access to employer property to engage in protected activity under the National Labor Relations Act.

In light of this activity, it is critically important for employers to work closely with labor counsel to ensure that their common workplace policies and practices are reviewed and modified to meet the National Labor Relations Board’s increasingly restrictive requirements.

Maryland has experienced an increased and well-publicized interest in union membership, initially arising out of workplace challenges from the COVID-19 pandemic and the “Black Lives Matter” movement. The prospect of layoffs in the face of economic uncertainty, along with increased worker activism, has also led to a rising interest in unionization of companies and organizations that have historically remained union-free. According to the US Bureau of Labor Statistics, the percentage of those employed in Maryland who are union members increased from 11.0% in 2021 to 11.6% in 2022, reversing a years-long decline.

There have been high-profile and successful union-organizing campaigns in Maryland, including the first Apple store to be unionized, as well as the Baltimore Museum of Art and the Walters Art Gallery. Other efforts are ongoing at hospitals, Starbucks stores and Amazon warehouses. Given the Biden administration’s support for unions, it is expected that union membership in Maryland will continue to grow.

At-Will Employment

In Maryland, the employment relationship is presumed to be “at will”. This means that either the employer or employee may terminate the relationship at any time, with or without cause or notice, as long as the termination is not prohibited by law, by an individual contract or by a collective bargaining agreement (CBA).

Statutory Protections

In addition to applicable federal laws, numerous Maryland laws contain protections against adverse employment actions, including termination of employment, for exercising rights under those laws. The following are among the more significant laws with such protections:

• Civil Rights Law (prohibiting discrimination and harassment) (Md Code Ann State Govt, Sections 20-601 et seq);
• Healthy Working Families Act (requiring paid sick leave) (Md Code Ann Lab & Empl, Section 3-1301);
• Occupational Safety and Health Act (Md Code Ann Lab & Empl, Sections 5-101 et seq);
• Wage and Hour Law (Md Code Ann Lab & Empl, Sections 3-401 et seq);
• Wage Payment and Collection Law (Md Code Ann Lab & Empl, Sections 3-501 et seq); and
• Workers’ Compensation Act (Md Code Ann Lab & Empl, Sections 9-101 et seq).

Contractual Exceptions

An individual contract that modifies the at-will relationship may be either express or implied and may be based on either verbal statements or written documents – for example, offer letters, employee handbooks, or employment agreements that provide for a term of employment or termination for cause. An employer may expressly disclaim the creation of such contracts by placing a clear and conspicuous disclaimer in all such written documents that reiterates the employee’s at-will status.

Additionally, although the implied covenant of good faith and fair dealing is an implied term of a contract under state law, Maryland does not recognize this implied covenant in at-will relationships.

Abusive Discharge

Maryland recognizes a cause of action for “abusive discharge” in violation of public policy as an exception to at-will employment. The public policy must be clearly articulated in law. Thus, employers may not terminate an employee for refusing to engage in conduct that violates the law or for asserting rights protected by law. This cause of action is not available where the law contains a specific statutory procedure and remedy for violations.

Joint Employer Status

Another employment relationship issue is whether two entities may be considered “joint employers” of a particular employee and therefore are together responsible for ensuring compliance with and liable under the various employment laws. Maryland state courts generally apply a right to control test that reviews various factors, as applicable – if each employer has the ability to control or direct the employee’s performance of the job, then they would be deemed joint employers.

However, the US Court of Appeals for the Fourth Circuit, which includes Maryland within its jurisdiction, articulated a more expansive standard under which joint employer status is more likely to be found under the Fair Labor Standards Act in Salinas v Commercial Interiors Inc, 848 F.3d 125 (4th Cir 2017).

Worker Misclassification

Maryland recognizes other work-based but non-employee relationships, including interns and independent contractors. Notably, the Maryland Department of Labor (MDOL) has a particular interest in the issue of employee misclassification – ie, when an employee is incorrectly designated as an independent contractor, thereby enabling the employer to avoid paying employment taxes and benefits. Where the MDOL finds that an employer has knowingly misclassified workers, a penalty in the amount of no more than USD5,000 per employee is payable for a first violation and USD10,000 per employee for subsequent violations. There is also a separate misclassification law specific to the construction and landscaping industries.

Whether an individual is deemed to be an employee or an independent contractor is subject to different tests, depending on the law at issue. By way of an example, the Unemployment Insurance Law and the Workplace Fraud Act (which applies only to the landscaping and construction industries) utilize the ABC test, under which a worker is presumed to be an employee unless all of the following are met:

• the individual is free from direction and control;
• the individual is customarily engaged in an independent business of the same nature as that involved in the work; and
• the work is outside the usual course of business of the person for whom it is performed or the work is performed outside any place of business of the person for whom it is performed.

On the other hand, both the Workers’ Compensation Act and the common law apply a “right to control” test under which an employer/employee relationship exists when the employing entity has the right to control and direct the individual performing the services. Many factors are reviewed under the “right to control” test, none of which are individually determinative.

Maryland has not enacted any laws specific to foreign workers. Immigration issues and the use of foreign workers are governed by federal law.

Non-discrimination and Accommodations

Whether in an employment application or an interview, Maryland employers must avoid asking questions that elicit information about protected characteristics under federal or state law or making employment decisions based on such characteristics. Under a 2022 amendment to the state antidiscrimination law as well as existing federal law, reasonable accommodations must be provided to enable disabled applicants to engage in the application process (Md Code Ann State Govt, Sections 20-601 et seq).

Maryland law allows employers to grant a preference in hiring or promotion to an eligible veteran, a veteran who has a service-connected disability, or – if deceased – the veteran’s spouse without violating state or local equal employment opportunity laws. An “eligible veteran” is one who received an honorable discharge or certificate of satisfactory completion of military service (Md Code Ann Lab & Empl Section 3-714).

In addition, under the Medical Questions Law, Maryland employers may not require an applicant to answer oral or written questions that relate to a physical, psychiatric or psychological disability, illness, handicap or treatment unless that condition has a direct, material and timely relationship to the capacity or fitness of the applicant to perform the job properly. Employers may, however, require a proper medical evaluation by a physician to assess the applicant’s ability to perform the job.

Wage Ranges and Salary History Ban

The Maryland Equal Pay Act requires an employer to provide the wage range for the position in question upon an applicant’s request. It further prohibits an employer from asking about or relying upon an applicant’s wage history in screening, hiring or determining wages. Employers may not retaliate against an applicant for exercising their rights under the law. The law acknowledges that an applicant may voluntarily provide their wage history and, after a conditional offer of employment is made, permits the employer to confirm and to rely on this information to support a higher wage offer than initially offered.

Lie Detector Testing

Applicants and employees may not be required to undergo lie detector testing (Md Code Ann Lab & Empl, Section 3-702). The law specifies that Maryland applications must contain – in bold-faced, upper-case type – the following statement, with a separate signature line: “Under Maryland law, an employer may not require or demand, as a condition of employment, prospective employment, or continued employment, that an individual submit to or take a lie detector or similar test. An employer who violates this law is guilty of a misdemeanour, and subject to a fine not exceeding USD100.”

Drug Testing

Maryland has passed a law that permits employers to drug test applicants and employees. The law contains detailed requirements that must be met, including the use of state-approved laboratories, specific notice requirements and restrictions on the type of specimens (blood, urine and saliva, and – in the pre-employment context – hair samples) that may be used. If the applicant or employee tests positive, the employer must provide the employee with a copy of the lab results, the employer’s written substance abuse policy, notice of any intent to take adverse action, and a statement or copy of the statutory provisions regarding the employee’s right to request independent testing of the same sample (Md Code Ann Health Genl Section 17-214).

Recruiting

Pursuant to the “anti-strikebreakers’ statute”, Maryland employers may not refer, obtain or recruit for employment individuals who customarily and repeatedly offer to be employed in place of labor strikers (Md Code Ann Lab & Empl, Section 4-403).

Credit History Checks

Under the Job Applicant Fairness Act, employers are prohibited from using an applicant’s or employee’s credit report or credit history to deny employment, terminate employment or otherwise make decisions about compensation or other terms of employment, except where expressly authorized by the law.

The law does not apply to employers that are required by federal, state or local law to check an individual’s credit history, nor does it apply to financial entities that are required to register as investment advisors with the SEC. Employers are permitted to procure the credit reports or credit histories of applicants (after a conditional offer of employment is extended) or employees if:

• the employer has a bona fide reason for obtaining the information that is substantially job-related, as defined in the law; and
• the employer discloses in writing that a report is being procured.

Social Media Checks

The User Name and Password Privacy Protection Act was the first workplace social media privacy law in the nation. Under this law, Maryland employers are prohibited from requiring employees or applicants to turn over passwords needed to access private websites, including those used for social media. Specifically, the law bars employers from requiring or even requesting that an applicant or employee divulge their “user name, password, or other means for accessing a personal account or service through an electronic communication device”. Employers may, however, require employees to divulge passwords for “non-personal accounts or services that provide access to the employer’s internal computer or information systems” (Md Code Ann Lab & Empl, Section 3-712).

Criminal Background Checks

Maryland enacted a statewide “ban-the-box” law that took effect in early 2020. Employers with 15 or more employees are prohibited from asking about an individual’s criminal record prior to the first in-person interview. During that interview, however, such information may be required to be disclosed. There are exceptions where an employer is required or authorized to seek such information by federal or state law or where an employer provides programs, services, or direct care to minors or vulnerable adults (Md Code Ann Lab & Empl, Sections 3-1401 et seq). Of note, the law specifically does not pre-empt any local ban-the-box laws – for example, those previously enacted by Baltimore City, Prince George’s County and Montgomery County, which impose greater restrictions on employers than the statewide law.

On the other hand, state law requires certain employers to conduct criminal background checks on applicants. These include schools, childcare centers, day or residential camps and recreation centers and employers providing adult dependent care services.

The Maryland Second Chance Act permits an individual to petition the court to shield certain specific misdemeanor convictions from public disclosure – including to employers – unless an exception applies. The law further specifically prohibits employers who conduct a criminal background check from requiring applicants to disclose if they have any such shielded convictions or from discharging or refusing to hire an individual because that person refuses to disclose shielded convictions.

Proponents of AI in the hiring process cite its benefits, which include streamlining the hiring process and eliminating human bias. However, there are some concerns that these tools can actually exacerbate bias or discrimination in the hiring process. Further, an employer’s use of AI could violate the American with Disabilities Act and state antidiscrimination law by “screening out” an individual with a disability who could perform the task with a reasonable accommodation. In addition, there are a multitude of privacy concerns with using AI in the hiring process – especially with regard to biometric data.

In response to the possible legal implications of using AI in the hiring process, Maryland was one of the first states to enact AI regulations for the workplace. In October 2020, the Maryland General Assembly passed the Facial Recognition in Employment Act, which prohibits employers from using facial recognition technology during the hiring process without obtaining consent. This is currently the only Maryland law regulating AI usage in the workplace. However, federal workplace agencies (eg, the Equal Employment Opportunity Commission and the National Labor Relations Board) have expressed significant concerns about employer use of AI and have suggested guidelines for its use, including verification of non-discrimination.

Although Maryland is an at-will employment state, employers and employees can enter into agreements that govern other aspects of the employment relationship.

Noncompete and Nonsolicitation Agreements

Maryland law prohibits employers from including a noncompete or conflict of interest provision in an employment contract with an employee earning USD15 or less per hour or USD31,200 or less annually. After October 1, 2023, however, the limit is increased to those earning less than 150% of the applicable minimum wage. Such provisions restricting the ability of the employee to work for a new employer or become self-employed in the same or similar business or trade are void as against public policy. Employers, however, may still prohibit such employees from taking client lists or other proprietary client-related information.

As regards higher-wage employees, restrictive covenants (eg, noncompete or nonsolicitation agreements) are generally enforceable in Maryland – provided that the restrictions as to geographic area and duration are reasonably necessary for the protection of the employer’s business, do not impose an undue hardship on the employee and do not disregard the public interests. Continued employment is considered sufficient consideration to support a noncompete or nonsolicitation agreement. Maryland courts may “blue pencil” or revise such agreements if it deems the original provisions to be too onerous and thereby unenforceable.

Confidentiality Agreements

Maryland employers may protect confidential and proprietary business information, including trade secrets, through the use of a confidentiality agreement that specifically identifies the protected information. Of relevance to this issue, Maryland has adopted the Model Uniform Trade Secrets Act. There are two types of trade secrets under the Act: internal operating information and technological developments. Employers may seek injunctive relief for actual or threatened misappropriation of trade secrets, as well as damages for actual loss, unjust enrichment and – if the actions were willful and malicious – attorney’s fees and exemplary damages.

Waiver of Sexual Harassment Claims

In the context of the “Me Too” movement, Maryland passed the Disclosing Sexual Harassment in the Workplace Act, which prohibits an employer from:

• requiring a waiver of future sexual harassment or retaliation claims; and
• taking adverse action against an employee for refusing to enter into an agreement with such a waiver.

Electronic Surveillance

The Maryland Wiretap Act prohibits an employer from listening to or recording a confidential communication without the consent of all parties. The law further prohibits the interception of oral, wire or electronic communications, thereby encompassing the monitoring of email. Employers should inform employees through a written policy or a message at the point of logging into the communications system that their communications are not private and may be monitored and that, by using the system, employees consent to such monitoring.

Other Statutory Privacy Protections

The Maryland Personal Information Protection Act governs the disposal of personal information, including employee data, and provides for notification of the breach of electronically maintained personal information. Notably, the definition of personal data includes biometric data.

As noted in 4.2 Artificial Intelligence and the Hiring Process, in 2020, Maryland also enacted a law governing the use of facial recognition technology in the hiring process. The Facial Recognition in Employment Act prohibits the use of a facial recognition technology during an applicant’s interview without their consent, which must meet specific statutory requirements.

The Wage Payment and Collection Act prohibits the display of social security numbers on employee checks, notices of direct deposit or notice of wage credits to debit cards or card accounts.

The Visual Surveillance with Prurient Interest Law makes it unlawful for any person, including an employer, to conduct visual surveillance of an individual in a private place without that individual’s consent and with prurient intent. A private place is a room where an individual may disrobe and has a reasonable expectation of privacy, such as a dressing room or restroom. The User Name and Password Privacy Act and the Medical Questions Law (see 4.1 Legal and Practical Constraints) also contain protections for employee privacy.

Tort Claims

Maryland recognizes certain tort claims for invasion of privacy.

• “Intrusion upon seclusion” is an intentional intrusion on the solitude or seclusion of another (or their private affairs or concerns) to the extent that it would be highly offensive to a reasonable person.
• “Appropriation of name or likeness” is the use or benefit, which need not be directly economic, of the name or likeness of another.
• “False light” involves knowingly or recklessly placing an individual before the public in a false light that is highly offensive to a reasonable person.

Finally, “publicizing private facts” arises when publicity in relation to a matter concerning an individual’s private life would be highly offensive to a reasonable person and is not of legitimate concern to the public.

Following the “Black Lives Matter” and “Me Too” movements, many employers focused on diversity, equity and inclusion (DEI) efforts in the workplace – despite some resistance from the Trump administration and conservative states. The Supreme Court’s 2023 decision banning affirmative action in college admissions has resulted in increased attention to employers’ DEI activities. Politicians in more conservative states have cautioned employers that such efforts might violate antidiscrimination laws by promoting the interests of certain minority groups to the detriment of others, while political leaders in more progressive states continue to encourage aggressive DEI efforts. Maryland falls squarely into the latter category – although employers should still be careful to comply with the law when implementing DEI initiatives, as increasingly emboldened employees may challenge these initiatives.

Harassment and Discrimination

Maryland law protects employees, independent contractors, and interns from employment discrimination and harassment on the basis of race, protective hairstyles (arising from the heightened awareness of racial equity issues), color, religion, sex, age, pregnancy, national origin, marital status, sexual orientation, gender identity, disability, or genetic information (or because of the individual’s refusal to submit to a genetic test or make available the results of a genetic test). Individuals are also protected from retaliation for asserting rights under the law. The law further requires employers to provide reasonable accommodations to employees – and, under a 2022 revision to the law, applicants – for disabilities, specifically those caused or contributed to by pregnancy.

The law applies to employers with 15 or more employees; however, if a harassment claim is involved, it applies to employers with a single employee. Revisions to the law in 2018 and 2022, spurred by the “Me Too” movement, expanded the definition of harassment beyond the federal law. Specifically, when it comes to sexual harassment, an employer is prohibited from requiring employees to waive future sexual harassment or retaliation claims.

Equal Pay

Maryland’s Equal Pay for Equal Work Statute prohibits discriminatory pay practices based on sex or gender identity against employees who work in the same establishment and perform work of a comparable character or work of the same type, on the same operation, or in the same business. The law also contains pay transparency provisions that protect employees’ rights to discuss their pay.

Military Service

As mentioned at 4.1 Legal and Practical Constraints, employers in Maryland may grant a preference in hiring or promotion to an eligible veteran or – under certain conditions – the veteran’s spouse. Other military-type protections are provided to National Guard members by the National Guard Employment and Reemployment Rights Act.

Like the Federal Occupational Safety and Health Administration (OSHA), the Maryland Occupational Safety and Health (MOSH) Administration has promulgated rules and regulations on workplace safety. The MOSH Act adopts OSHA standards in most respects, including record-keeping, requiring safety training for employees, and investigations into workplace injuries and illnesses. In addition to notifying OSHA of any serious injury or death, employers must also notify MOSH.

In the context of COVID-19, Maryland enacted the Essential Workers’ Protection Act (EWPA). Among other things, this required MOSH to adopt any Emergency Temporary Standard (ETS) issued by federal OSHA. OSHA’s subsequently issued ETS, which is no longer in effect, applied only to healthcare employers. As regards other industries, MOSH has not adopted any state-specific COVID-19 standards, but relies upon federal OSHA guidance instead. The EWPA, however, applies beyond COVID-19 to future catastrophic public health emergencies. Among other things, it will require employers to:

• ensure that working conditions comply with federal or state standards;
• provide protective equipment; and
• provide paid public health emergency leave under certain circumstances.

Another issue of particular interest is protection against workplace violence. A 2021 Maryland law modifies the existing peace order process so as to permit an employer to petition a court for a peace order (ie, a restraining order) on behalf of an employee based on acts or threats of violence against that employee in the employer’s workplace.

As mentioned in 3.1 Defining and Understanding the Relationship, termination of at-will employees may take place at any time, with or without cause or notice. If the employee has a contract for a specific period or that provides for termination only for cause, then the terms of the contract must be followed. Similarly, if the employee is subject to a CBA, termination must comply with the terms of the CBA.

Severance and Benefits

Maryland law does not require the payment of severance. If an employer chooses to pay severance and obtain a release of claims, the release must contain certain language to comply with federal law (eg, Age Discrimination in Employment Act language, carve-out for filing of charges with the Equal Employment Opportunity Commission, and whistle-blower language), but there are no specific state requirements.

As for benefits upon termination, employers must comply with their notice obligations under the Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) for continued healthcare coverage. Maryland also has a healthcare continuation law that is similar to COBRA, applicable to all employers regardless of size. Employees are entitled to up to 18 months of continuation coverage if they are a resident of Maryland, they have been covered by the employer’s plan for three months and they resign or are involuntarily terminated not for cause. This coverage also extends to the employee’s spouse or dependent child in the case of the death of the employee.

Mass or Group Layoffs

With regard to mass or group layoffs, Maryland has a law similar to the WARN Act. Compliance with the state law, the Economic Stabilization Act, was originally voluntary. However, it was amended in 2020 to make its requirements mandatory and further amended in 2021 to better – but not wholly – conform to the federal law. The mandatory provisions will not be enforced until the MDOL issues regulations to implement the revisions.

Under Maryland law, employers with at least 50 employees will need to give employees and certain other entities 60 days’ advance notice of a reduction in operations, which is defined as:

• the relocation of a part of the employer’s business from one workplace to another existing or proposed site that may result in the reduction in the number of employees by at least 25% or 15 employees (whichever is greater); or
• shutting down a workplace that reduces the number of employees by the greater of at least 25% or 15 employees during a three-month period.

There are certain statutory exceptions to this notice requirement.

If there is a violation, the Maryland Secretary of Labor can issue an order compelling compliance and may assess a discretionary civil penalty of up to USD10,000 per day, subject to notice and hearing requirements.

In addition, the law is intended to provide assistance to employers and employees to mitigate the impact of a reduction. Through its “Quick Response Program”, the Department of Economic and Employment Development provides services such as on-site registration for mass unemployment claims, job placement and referrals for job training opportunities.

Contract and Tort Claims

In addition to statutory discrimination or harassment claims, employees often bring contract or tort claims against their employer. These claims are governed by state law. Contract claims arise from the breach of a formal employment agreement, but employees have also asserted contract claims based on – among other things – handbook policies, oral statements, and offer letters (as discussed in 3.1 Defining and Understanding the Relationship). Tort claims are premised on emotional or other harm experienced by an employee in the context of their employment. (Physical injury is covered by workers’ compensation.)

Claims based on contracts and torts may be brought before Maryland district courts or circuit courts. Maryland district courts hear civil cases involving claims up to USD30,000; circuit courts hear cases exceeding USD5,000 (there is concurrent jurisdiction between USD5,000–USD30,000). In addition, state contract and tort claims may be asserted in a lawsuit in federal court as pendant claims to a federal claim or if there is federal diversity jurisdiction between the parties.

There is a one-year statute of limitations for assault, libel and slander claims. All other tort claims – such as for abusive discharge, negligent misrepresentation, negligent hiring or supervision, or tortious interference with contractual relations – are subject to a three-year statute of limitations. Contract claims are also subject to a three-year statute of limitations.

In a contract claim, a plaintiff may obtain actual damages arising from the breach of contract. Liquidated damages are not available unless the contract provides for their recovery. As for tort claims, a plaintiff may receive compensatory damages and – if actual malice is shown by clear and convincing evidence – punitive damages. There is no cap on economic compensatory damages; however, in 2022, there was a USD905,000 cap on non-economic compensatory damages such as pain and suffering.

Other Statutory Claims

All of the various employment laws in Maryland provide for complaints to the Commissioner of Labor and Industry, who may mediate the dispute or direct the Attorney General to bring suit on behalf of the employee for damages, injunctive relief or other relief. The employer may also be liable for administrative or civil penalties.

Some but not all of the laws also provide a private right of action for violations of those laws and specify the damages that may be obtained. In addition to the antidiscrimination law, these laws include:

• Healthy Working Families Act (Md Code Ann Lab & Empl  Section 3-1308);
• Parental Leave Act (Md Code Ann Lab & Empl, Sections 3-1207 et seq); and
• Workplace Fraud Act (Md Code Ann Lab & Empl, Section 3-911).

Wage and hour claims proliferate in the Maryland court system. To avoid such claims, employers should ensure that:

• they are properly classifying employees as exempt or non-exempt from the minimum wage and overtime provisions of the federal and state wage and hour laws;
• they are accurately tracking hours worked by non-exempt employees; and
• they are paying all wages and benefits due while refraining from inappropriate deductions from pay.

It is important to train managers to ensure that non-exempt employees are not working “off the clock”.

Minimum Wage and Overtime Violations

Under the Maryland Wage and Hour Law, an employee who failed to receive either the minimum wage rate or overtime premiums can bring a claim before the state circuit court for the amount that was underpaid. The court may award the difference in wages, attorney’s fees and costs. In addition, the court may award an equal amount of the wage differential as liquidated damages, unless the employer can show that it acted in good faith and reasonably believed it was in compliance with the law – in which case, the court may either waive or reduce the liquidated damages amount. An employee may also ask the Commissioner of Labor and Industry (“the Commissioner”) to take an assignment of the claim in trust for the employee. The Commissioner may then direct the Attorney General to bring an action on behalf of the employee.

Any violations of the law, including the employer’s failure to cooperate with the Commissioner’s investigation into a complaint or retaliatory action against an employee who asserts rights under this law, will result in the employer being found guilty of a misdemeanor and subject to a fine not exceeding USD1,000.

Wage Payment Violations

Under the Maryland Wage Payment and Collection Law, if wages are not paid in a timely manner, the employee may file a complaint with the Commissioner. If the Commissioner finds a violation, the Commissioner may attempt to mediate the dispute or may direct the Attorney General to bring suit on behalf of the employee. If the amount in dispute is less than USD5,000, the Commissioner may issue an order to pay the wages ‒ in response to which, the employer may request an administrative hearing. The Commissioner may seek enforcement of a wage order in district court. Additionally, violations will be considered a misdemeanor and subject the employer to a fine not exceeding USD1,000.

If the failure to pay lasts longer than two weeks, an employee also has the option to file a private lawsuit with the circuit court. Should a court or jury find a violation, the employer will be liable for the amount of the withheld wages and – where the withholding was not the result of a bona fide dispute – up to three times the amount of the lost wages, as well as attorney’s fees and costs. Notably, an individual owner or supervisor with the power to hire and fire, supervise and control terms and conditions of employment, determine the rate and method of payment and maintain employment records can be held individually liable under the law.

In addition, Maryland has enacted a wage lien law providing a mechanism for an employee or the Commissioner to obtain a lien on an employer’s personal or real property in order to secure an amount of unpaid wages and penalties allegedly due before any judgment has been entered (Md Code Ann Lab & Empl, Sections 3-1101 et seq).

See also 7.1 Contractual Claims.

Maryland has enacted several statutes that provide whistle-blower protections for private sector employees. Under these statutes, employees are protected from adverse employment action for reporting certain kinds of wrongdoing or legal violations to state governmental agencies.

The Maryland Occupational Safety and Health Act protects employees who file complaints about safety violations. The State Contractor Employees’ Whistleblower Protection Act protects contractors and subcontractors of Maryland’s executive branch agencies who report abuse of authority, gross mismanagement, gross waste of money, a substantial and specific danger to public health or safety, or a violation of law. Finally, the Health Care Worker Whistleblower Protection Act protects licensed or board-certified healthcare workers who make written reports to management concerning legal violations that pose a danger to public health or safety.