Maryland Passes Pay Transparency Law

Maryland Governor Wes Moore signed a pay transparency requirement into law on April 25, 2024, requiring that all employers in Maryland include wage ranges and benefit information in all job postings.

The law, Equal Pay for Equal Work – Wage Range Transparency, will go into effect on October 1, 2024. In passing this law, Maryland joins in on a rapidly growing trend as multiple other states have passed similar requirements over the last few years, including California, Colorado, Connecticut, Hawaii, Nevada, New York, Rhode Island, and Washington. The new Maryland requirements are in addition to the state’s existing pay equity legislation, including a salary history ban and a pay range upon request requirement, both passed in 2020.

Pay Transparency Requirements

Covered employers must disclose, in all public or internal job postings, a “wage range and a general description of benefits and any other compensation offered for the position.” There is not yet any guidance available interpreting this law, including the broad language regarding disclosure of “any other compensation offered for the position.”

Under the statute, a “wage range” is the minimum and maximum pay for a position, set in good faith by reference to any applicable pay scale, any previously determined minimum or maximum wages for the position, the wage range of a comparable position, or the budgeted amount for the position.

If a posting with this information is not made available to an applicant for the position, the employer is required to provide the applicant with the above information (1) before having any conversations regarding compensation with the applicant and (2) at any other time upon request by the applicant.

The Commissioner of Labor and Industry shall develop and make available to employers a form that employers can incorporate into job postings to comply with the law.

Covered employers are also required to maintain records illustrating compliance with the law for at least three years after the position is filled or, if the position is not filled, from when the position was initially posted.

Employers cannot retaliate against employees and applicants for requesting the wage range in accordance with this law, not providing their wage history, or otherwise exercising their rights under the law.

Coverage Under the Law

The law applies to all employers (or persons who act directly or indirectly with an employee on behalf of another employer) that engage “in a business, industry, profession, trade, or other enterprise in” Maryland. There is no minimum employee requirement for coverage under this law.

The law also states that the disclosure requirements only pertain to positions that “will be physically performed, at least in part,” in Maryland. The legislature has not defined “at least in part” and thus it is unclear whether the law applies to positions that are based in another state but performed remotely in Maryland on occasion.

The law also applies to any solicitation intended to recruit applicants for a specific position, which includes indirect recruitment through a third party. For example, if an employer utilizes a recruiting agency, the agency would also need to include the necessary disclosures in its advertisements.

Enforcement

Employers that fail to comply with the pay transparency requirements will be subject to an order by the Maryland Division of Labor and Industry compelling compliance.

The Commissioner of Labor and Industry has discretion to impose the following penalties for noncompliance:

• First Violation: Letter compelling compliance
• Second Violation: Civil penalties of up to $300 for each employee/applicant for whom the employer is not in compliance
• Third and Subsequent Violations: Civil penalties of up to $600 for each employee/applicant for whom the employer is not in compliance if the violation occurred within three years after a previous finding of a violation

In determining penalties, the Commissioner shall consider the severity of the violation, the employer’s size, good faith or lack thereof, and any history of other related violations.

There is no private right of action under this law.

Next Steps for Employers

In advance of the October 1 effective date, all employers that expect to hire employees who work at least part of their time in Maryland should review all public and internal-facing job postings and advertisements for the new roles to ensure these materials include the required wage and benefit information. Because existing Maryland law already requires employers to provide wage information to applicants upon request, employers may be able to leverage such information in updating postings, as needed.