Shining a Light on Pay: Maryland Employers Embrace Wage Transparency Mandates

Starting October 1, 2024, Maryland employers will be required to disclose certain wage and benefit information for their job postings—both internally and externally. The Wage Range Transparency Act expands the reach of its existing Equal Pay for Equal Work Law, which currently only requires disclosures upon an employee’s request. With the passage of the Act, Maryland becomes part of the growing trend for states legislating for greater transparency in employee pay.

Applicability

The new law applies to all employers, regardless of size, both public and private. It applies to positions that are physically performed, at least in part, in Maryland. The law does not provide what it means have a position be physically performed “at least in part” within the state.

Requirements

Once the law goes into effect, employers will be required to post a “wage range” for both internal and external job postings. The law is also triggered for any solicitation of an applicant for a position, meaning that the law applies whether the employer seeks applicants through a traditional job posting or if a third-party recruiter presents an applicant.

A “wage range” is “the minimum and maximum hourly or salary wage for a position” and is determined by the employer based on data from a pay scale, a previously determined minimum and maximum wage for the position, the minimum and maximum wage for employees already in the position, or the budgeted amount for the position.

Along with the wage range, employers must also include in the posting a “general description of benefits and any other compensation offered.” The law does not specify what type of information satisfies that requirement.

Maryland’s Commissioner of Labor and Industry has been charged with creating a form disclosure for employers, which may shed light on how to comply with that “general description” obligation.

Employers are also obligated to maintain records of wages, job classifications, and other information for three years after the position is filled. If the position is not filled, employers are obligated to maintain the posting for the same three-year period.

Consequences for Violations

Violations will be subject to enforcement through the Maryland Commissioner of Labor and Industry. First-time violations may subject an employer to a compliance order, with the potential penalties increasing with each subsequent violation. A second violation may result in up to a $300 civil penalty being assessed for each posting’s non-compliance. For each subsequent violation within a three-year period, the penalties may reach up to $600 per instance. The Commission of Labor and Industry will have discretion to order penalties, taking into consideration factors such as the size of the employer and good-faith efforts to comply.

While there is no private cause of action, there are protections from retaliation for both applicants and employees who request a wage range, refuse to provide their wage history, or exercising any other rights under the law.

Conclusion

Maryland employers should initiate the collection of wage ranges and benefit details for each position within their company. This step is crucial before the obligation to disclose such information in job postings becomes effective later this year. Employers subject to this requirement should also commence training their hiring departments to ensure that staff handling job postings are well-versed in relevant laws and equipped with systems to maintain accurate records.

Buchanan’s labor and employment attorneys are diligently monitoring updates on challenges to the final regulation and stand ready to address any inquiries regarding your company’s practices and policies.