Before Your Next Hire, Read This!

Pessin Katz Law, P.A.
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Pessin Katz Law, P.A.

On October 1, 2020, a new Maryland law will take effect which has two important components for Maryland Employers to keep in mind when hiring new employees:

  • Employers will be prohibited from requesting or relying upon a job applicant’s prior wage history when determining the wages of the applicant or considering the applicant for employment; and
  • Employers will be required to provide applicants for employment, upon request, the wage range for the position for which the applicant applied.

House Bill 123, which past during this year’s legislative session, amends the Maryland “Equal Pay for Equal Work” law which previously just applied to employees, not applicants. On October 1, 2020, Maryland will join 18 other states and dozens of local jurisdictions in prohibiting wage history inquiries. However, the Maryland law contains a notable exception to the prohibition of wage history inquiries. After an employer makes an initial offer of employment that specifies compensation, the employer may seek to confirm and rely on an applicant’s wage history that is voluntarily provided by the applicant in order to support a wage offer that is higher than the initial wage offered by the employer.

The law also expressly prohibits employers from retaliating against an applicant by refusing to interview, hire, or employ an applicant because the applicant did not provide a wage history or requested the wage range of the position for which the applicant applied.

If an employer violates the new law, the Commissioner of Labor and Industry must issue an order compelling compliance. For a second violation, the Commissioner may asses a civil penalty of up to $300 per applicant for whom the employer is not in compliance. The penalty increases for each subsequent violation up to a maximum of $600 per applicant. In determining the penalty, the Commissioner will consider the gravity of the violation, the size of the employer’s business, the employer’s good faith, and the employer’s history of violations of the law.

What does this mean for Maryland employers? Maryland employers should review their employment application policies and practices to comply with the new wage history and wage notice requirements of the Equal Pay for Equal Work law. Employers should also begin developing a “wage range” for each job classification if they have not done so already. Since the “wage range” must be shared with an applicant upon request, it should be memorialized on a formal document (i.e., job description). Additionally, hiring managers should be trained on these new requirements to avoid incurring civil penalties due to violations.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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