On October 1, 2020, a new Maryland law related to compensation will:
- prohibit employers from requesting or relying on job applicants’ prior pay history to make decisions about employment or initial pay in most circumstances; and
- require an employer to provide an applicant, upon request, with the wage range for the job applied for.
The new law amends Maryland’s existing Equal Pay for Equal Work (EWEW) law. Its requirements, which will apply to all private, state, and local government employers in Maryland, add to existing provisions that set nondiscrimination and equal pay standards and prohibit employers from requiring employees to keep their pay information confidential.
Wage history restrictions
Maryland joins approximately 18 other states and nearly two dozen local jurisdictions in limiting the circumstances in which employers may request or use a job applicant’s wage history information. (Neighboring Virginia and the District of Columbia currently have wage history restrictions only for government agencies).
Under the new Maryland law, employers may not seek wage history information from an applicant or the applicant’s current or former employers, and may not rely on wage history in screening applicants, considering applicants for employment, or setting initial pay.
There is one narrow exception: Once the employer makes a job offer (including a compensation offer), the employer may seek to confirm and may rely on any wage history voluntarily provided by the applicant in order to support the employer making a compensation offer higher than the employer’s original offer.
Wage range requirement
The new law also requires employers to give job applicants, upon request, “the wage range for the position for which the applicant applied.” “Wage range” is not defined, and the law does not explain what steps employers need to take to comply with the law if they do not have pre-determined wage ranges for every job classification.
Existing protections related to compensation
As a reminder, the EWEW contains other protections for employees related to compensation. The EWEW prohibits Maryland employers from providing “less favorable employment opportunities” based on sex or gender identity and from paying employees of one sex or gender identity less than other employees when both employees work in the same establishment (which may include different workplaces of the employer within the same county) and perform work of “comparable character” or work “on the same operation, in the same business, or of the same type,” except for specified reasons including, for example, a nondiscriminatory seniority or merit increase system.
The EWEW also contains a pay transparency requirement, which provides that employers may not prohibit employees from “inquiring about, discussing, or disclosing” their own or a co-worker’s pay. (Another recent amendment to the EWEW, which also goes into effect October 1, clarifies that retaliation is prohibited when an employee inquires about not only a co-worker’s wages, but also the employee’s own wages.) However, employers may establish reasonable “time, place, and manner” limitations on such conversations by written policy. The pay transparency rule does not apply when an employee, such as a Human Resources staff member, who has access to the wage information of other employees as part of his or her essential job functions, discloses another employee’s pay information without permission, except in the course of an investigation or legal proceeding. (As we discussed here, Virginia recently adopted a pay transparency provision that became effective July 1, 2020; D.C. also has a pay transparency law.)
Violations of the wage history and wage notice requirements are subject to civil penalties of up to US$300 for each applicant for whom the employer is not in compliance, and up to US$600 for each subsequent violation. Other violations of the EWEW are subject to actions for damages and/or injunctive relief by the employee or the Attorney General, in addition to potential civil penalties.
Employer Next Steps
All employers in Maryland should ensure that their policies and practices comply with the new wage history and wage notice amendments to the EWEW and the EWEW generally. Specifically, employers should remove any requests for prior pay information from job applications and should train recruiters and managers on all EWEW requirements. Employers who do not currently have formal wage ranges for each job classification should consider establishing a range for each new job posting, which could be shared with applicants who request it.