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New Laws Impacting Maryland Employers

July 22, 2014

By: Melissa Calhoon Jones

The Maryland General Assembly enacted numerous bills during the 2014 legislative session, which were recently signed by Governor Martin O’Malley.  The following are some of the more significant laws enacted that will impact Maryland employers.

Maryland Minimum Wage Increase

One of the most significant employment laws passed was the increase to the state’s minimum wage starting January 1, 2015. The law will gradually increase the state’s minimum wage from the current $7.25 to $10.10 an hour.

The increase will be phased in as follows:

DATE MINIMUM WAGE
   January 1, 2015    $8.00
   July 1, 2015    $8.25
   July 1. 2016    $8.75
   July 1, 2017    $9.25
   July 1, 2018    $10.10

 

The minimum wage for tipped employees will remain at $3.63 as long as tips make up the difference between $3.63 and the minimum wage in effect at that time. As the minimum wage continues to increase, employers will need to monitor more closely the wage for tipped employees.  For example, once the minimum wage hits $10.10, the difference between $3.63 and the minimum wage will be $6.47.  Depending on the industry, it may be difficult for an employee to obtain such a large amount in tips and thus the employer will need to consider increasing the minimum wage for its tipped employees.

The law also makes several other changes to Maryland’s wage and hour laws:

  • It creates new exceptions that: (1) allow individuals under age 20 to be paid 85 percent of the minimum wage for the first six months of employment and (2) allows employers of amusement or recreational establishments to pay employees 85 percent of the minimum wages rate or $7.25, whichever is higher.  For example, college interns under the age of 20, who are home for summer break, can be paid 85 percent of the minimum wage. But if those students return to that same job the following summer, the previous three months are calculated in determining the six month window.
  • It requires hotels and motels, restaurants, gasoline service stations, private country clubs, and nonprofits engaged primarily in providing temporary at-home care service to pay overtime to employees who work more than 40 hours per week.
  • It increases the penalty if an employer pays an employee less than minimum wage. In addition to unpaid wages, employees can also recover liquidated damages, plus attorneys’ fees and costs, if the court determines that an employee is entitled to recovery.  But if an employer proves that it acted in good faith and reasonably believed that the wages paid to the employee were not less than the required wages, then the court may award a lesser amount of liquidated damages and attorneys’ fees or none at all.

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Other Employment Related Laws

Three additional employment related laws take effect on October 1, 2014:

Fairness For All Marylanders Act

The new law prohibits discrimination based on gender identity with regard to public accommodations, housing, and employment. “Gender identity” is defined as a gender-related identity, appearance, expression, or behavior of an individual regardless of the individual’s assigned sex at birth.

The law permits an employer to establish and require an employee to adhere to certain reasonable workplace appearance, grooming, and dress standards as long as an employee is allowed to appear, groom, and dress consistent with the employee’s gender identity.

Unpaid Parental Leave – Birth or Adoption of a Child

Under the new law, employers with 15 to 49 employees must provide their employees with unpaid parental leave benefits.  An eligible employee may take unpaid parental leave up to six weeks in a 12-month period for the birth, adoption, or foster placement of a child.  During the leave period, the employer must maintain the employee’s health insurance coverage but the employer may recover the premium if the employee fails to return to work.

To be eligible, an employee must have worked for the employer for at least one year and for 1,250 hours in the previous 12 months. This law does not apply to independent contractors or to an individual who is employed at a work site at which the employer employs fewer than 15 employees within 75 miles of the work site.

An employee must provide the employer with 30-days’ notice of the parental leave need, unless the employee takes leave because of a premature birth or an unexpected adoption or foster placement. An employer may deny parental leave only if the denial is necessary to prevent “substantial and grievous economic injury” to its operations and the employer notified the employee of the denial before the leave begins.

After the parental leave, the employee must be restored to his or her previous position or to an equivalent position. An employer may deny restoration if: (1) the denial is necessary to prevent substantial and grievous economic injury to the operations of the employer; (2) the employer notifies the employee of the intent to deny restoration at the time it determines that such economic injury would occur; and (3) in the event the parental leave has already begun, the employee elects not to return to employment. During the parental leave period, an eligible employee may be terminated only for cause.

The law requires the Commissioner of Labor and Industry, a division of the Maryland Department of Labor, Licensing, and Regulation (“MDLLR”), to adopt regulations to implement the law’s provisions. The law also authorizes the Commission to investigate any violations of the law and to bring an action on behalf of the employee, if necessary.  In such an action, the employee may recover damages equal to the amount of wages, salary, employment benefits, or compensation denied or lost.  If a court determines that the employer violated the law, the court must award attorneys’ fees and other costs to the employee.

Employers should take the following steps to comply with the statute: (1) prepare an appropriate parental leave policy; (2) train managers on the requirements of the statute; and (3) make sure the appropriate steps are being taken to allow or deny leave requests and to transition employees back into their positions after returning from parental leave.

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Nursing Homes and Health Care Facilities: Workplace Safety Assessment and Safety Program

In an effort to reduce and mitigate the risk of injury in health care facilities, a new law was passed that requires nursing homes and health care facilities to create workplace safety programs. The law requires nursing homes that are licensed for 45 or more beds to assign to a committee the task of conducting an annual assessment of “workplace safety” issues and make recommendations to the nursing home for reducing workplace injuries. The committee must consult with geriatric nursing assistants and other employees of the nursing home who are involved in assisting residents with activities of daily living.

Similarly, a healthcare facility must establish a workplace safety committee, which must establish and administer a workplace safety program that is appropriate for the size and complexity of the health care facility. The committee shall be composed of an equal number of employees who work in management and employees who do not work in management.

The workplace safety program established by a health care facility must include: (1) a written policy describing how the health care facility provides for the safety of health care workers; (2) an annual assessment to identify hazards, conditions, operations, and situations that could lead to workplace injuries and be used to develop recommendations to reduce the risk of workplace injuries; (3) a process for reporting, responding to, and tracking incidences of workplace injuries; and (4) regular workplace safety training for health care workers.

“Workplace safety” means the prevention of any physical assault or threatening behavior against an employee in a nursing home or health care facility. “Health care facility” means a hospital or State residential center and includes a subacute care unit of a hospital or a State-operated hospital.

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Update on Maryland’s Wage Lien Law

In 2013, a law was enacted that allows employees to place a wage lien on the property of their employer for unpaid wages. Under the law, MDLLR is required to adopt regulations to establish the content of the Notice, Complaint, and Wage Lien Statement.

MDLLR’s Division of Labor and Industry is still in the process of developing regulations to implement this new law, but several forms are now available online, including a sample Notice to Employer of the Intent to Claim Lien for Unpaid Wages. The forms can be found here.

With the dramatic changes to Maryland’s minimum wage laws and the new unpaid leave requirements for employees, it is imperative that Maryland employers familiarize themselves with the requirements and exemptions provided in the new laws and speak with their employment counsel regarding their impact. Nursing homes and health care facilities should also work with employment counsel to create workplace safety programs that are suitable for their facilities.

Melissa Jones counsels companies on labor, employment, and immigration matters.  If you would like further information, please contact Ms. Jones at mjones@tydingslaw.com.

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