The Maryland Department of Labor (MDOL) issued proposed regulations last month to the Economic Stabilization Act. Also known as the Maryland Mini-WARN Act, it provides notice requirements and guidance to employers faced with a shutdown of a plant, factory, or office or a major reduction in their workforce.
The proposed regulations amend definitions, time and notice requirements to the act and implement compliance and penalty requirements. The public-comment period closed Tuesday, while a public hearing to review the proposed regulations has not been scheduled.
What is the Maryland Economic Stabilization Act?
The act applies to a person, entity or corporation employing at least 50 employees and operating an industrial, commercial or business enterprise in Maryland. The act only applies to employers who have been conducting business in Maryland for at least one year.
Notice is triggered under the act when there is a reduction in operations, defined as:
(1) the relocation of a part of an employer's operation from an initial workplace to another existing or proposed site that may reduce the total number of employees at the initial workplace by at least 25% or 15 employees, whichever is greater; or
(2) the shutting down of a workplace or a portion of the operations of a workplace that reduces the total number of employees by at least 25% or 15 employees, whichever is greater, over any three-month period.
The act requires employers to provide impacted employees, representatives of those employees, the Maryland Dislocated Worker Unit and the chief elected official in the affected jurisdiction with at least 60 days’ notice before initiating a reduction in the work force. The act specifies the requirements necessary in the notice, none of which is part of the proposed changes to the regulations.
What is Potentially Changing?
The proposed regulation adds remote workers to the definition of workplace – “workplace includes locations in the State where employees may be teleworking.” This suggests that the act will extend to an employer’s remote workforce and is not limited to a physical workplace such as a plant, office, factory or facility. But it is unclear how it will be determined where a teleworker is officially working for purposes of counting the number of employees in a workspace.
Additionally, the proposed action clarifies that notice must be provided to employees within 60 calendar days prior to initiating a reduction in operations or shut down. Currently, the act states that an employer must provide written notice at least 60 business days before the reduction.
The proposed action also requires that any order issued by the secretary of Labor, or their designee, to force an employer to comply with the act be in writing, describe the nature of the violation and state the proposed penalty. An employer who receives an order of compliance can file a written notice to the secretary contesting the proposed penalty within 15 days of receiving the order.
Miles & Stockbridge’s labor and employment lawyers will monitor the upcoming public hearing and the final regulations.
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