Employment Law Update

Hero Image for page

Maryland Enacts Ban on Salary History Inquiries and Closes Loophole in the Equal Pay for Equal Work Law

During this legislative session, the Maryland General Assembly passed two amendments to the state’s Equal Pay for Equal Work law. Both were enacted without Governor Lawrence Hogan’s signature and will be effective October 1, 2020.

Maryland’s Equal Pay for Equal Work law, passed in 2016 to expand Maryland’s prohibitions against discriminatory pay practices, prohibits gender-based pay discrimination. Previously, the law applied only to employees and not job applicants.

The first amendment, HB123, has two components. It adds a requirement that employers provide a wage range for a position to applicants upon request and creates a salary history ban.

Wage Range Upon Request

The new law obligates an employer to provide an applicant, upon request, the wage range for the position for which the applicant applied. Employers may not retaliate against or refuse to interview, hire or employ an applicant who does not provide a wage history or requests a wage range from the employer.

Salary History Ban

Maryland has joined a wave of other states and local jurisdictions that restrict an employer’s ability to inquire into an applicant’s salary history during the hiring process. Under the new law, an employer may not:

  • Rely on an applicant’s wage history in screening or considering the applicant for employment or in determining the applicant’s wage; or
  • Seek an applicant’s wage history either orally or in writing, or through an employee or agent or an applicant’s current or former employer.

The act affirms that applicants are able to voluntarily share their wage history with an employer during the hiring process. After an employer makes an initial offer of employment, including a proposed level of compensation, the employer may:

  • Rely on an applicant’s voluntarily provided wage history to support a wage offer higher than the initial wage offered; or
  • Seek to confirm an applicant’s voluntarily provided wage history to support a wage offer higher than the initial wage offered.

However, an employer may only rely on voluntarily provided wage history if doing so does not create an unlawful pay differential based on sex or gender identity.

Remedies for Violation

Applicants may complain to the Maryland Department of Labor’s Commissioner of the Division of Labor and Industry, who enforces the state’s Equal Pay law. If the commissioner determines that an employer has violated the above prohibitions, the commissioner is required to issue an order compelling compliance. Additionally, the commissioner may in his or her discretion:

  • Issue a letter compelling compliance for a first violation;
  • Assess a civil penalty of up to $300 for each applicant for employment for whom the employer is not in compliance for a second violation; or
  • Assess a civil penalty of up to $600 for each applicant for employment for whom the employer is not in compliance for each subsequent violation, if the violation occurred within three years of a previous determination of a violation.

In determining the amount of the penalty, the commissioner must 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 under the wage laws. Penalties assessed by the commissioner are subject to notice and hearing requirements.

Loophole Closed

The second amendment, HB14, prohibits an employer from taking any adverse employment action against employees for inquiring about their own wages. The General Assembly enacted this amendment to correct a loophole that had previously only protected employees from retaliation for inquiring about the wages of other employees.

Next Steps for Employers

To ensure compliance with these new requirements, employers will need to create formal wage ranges for all positions. Employers should also review their application materials to be sure they do not require applicants to provide information about salary history. Also, managers, hiring personnel and human resources employees must be trained on these new restrictions during the hiring process.

If you have any questions, please contact Charles R. Bacharach or James D. Handley.

Charles R. Bacharach
410-576-4169 • cbacharach@gfrlaw.com

James D. Handley
410-576-4201 • jhandley@gfrlaw.com