Maryland Pay Transparency Law

Maryland expanded its pay equity protections in 2016 with the Equal Pay for Equal Work Act. The act amended the state’s equal pay law to protect against wage discrimination based on sex and gender identity.

Two new amendments to the law, effective October 1, 2020, provide additional protections for applicants and employees and create new obligations for employers. The first amendment, HB123, requires employers to provide a wage range for a position when requested by an applicant. It also prohibits employers from asking job applicants about their salary history. The second amendment, HB14, closes a previous loophole by prohibiting adverse employment actions against employees who inquire about their own wages. Previously, the law only protected employees who inquired about the wages of their colleagues.

What employers does it apply to? 

The Equal Pay for Equal Work law applies to all employers in Maryland regardless of size.

Key requirements

There are four main components to Maryland’s amended Equal Pay for Equal Work Act: equal pay for equal work, wage range upon request, salary history ban, and freedom to discuss wages with others without fear of retaliation.

We discuss the key requirements below.

1. Equal pay for equal work

The Maryland Equal Pay for Equal Work law prohibits employers from discriminating against employees by:

2. Wage range upon request

The law requires employers to provide an applicant, upon request, with the wage range for the position for which they applied. Employers are not allowed to retaliate or discriminate against an applicant who does not provide a wage history or requests a wage range from the employer.

3. Salary history ban

The law restricts employers from asking about an applicant's salary history during the hiring process. Under the new law, employers are prohibited from:

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

The Act permits employers to inquire about a prospective employee's wage history only after extending a job offer. The purpose of such an inquiry must be to justify a salary offer that exceeds the initial one.

4. Freedom to discuss wages with others without fear of retaliation

The Equal Pay for Equal Work Act also protects employees from retaliation by employers. An employer cannot take adverse action against an employee or prospective employee if the employee:

• Asks about wages.
• Discusses wages.
• Complains about a wage disparity to the employer, another employee, or Maryland’s Department of Labor.
• Brings legal action against the employer for violating the Equal Pay for Equal Work Act.
• Testifies in an Equal Pay for Equal Work Act lawsuit.

An adverse work action includes reprimanding, firing, disciplining, transferring, harassing, failing to promote, or creating a hostile environment for the employee.

What are the enforcement mechanisms in place and the penalties for non-compliance?

Equal pay for equal work violation:

Employees or job applicants who believe their employer violated the Equal Pay for Equal Work Act can file a complaint with the Maryland Department of Labor. The Commissioner may work to resolve the issue or request the Attorney General to initiate legal action. Employees can also file a lawsuit, and if successful, may receive injunctive relief, monetary damages, and attorney fees. Complaints must be filed within three years with the Department of Labor or in court.

Wage range disclosure and salary history ban violations: 

Applicants may complain to the Maryland Department of Labor's Commissioner of the Division of Labor and Industry. The Commissioner can issue an order compelling compliance for a first violation. The Commissioner may also impose civil penalties of up to $300 for each applicant for a second violation and up to $600 for each applicant for subsequent violations within three years.

How can PayAnalytics help Maryland employers meet the Equal Pay for Equal Work Act’s requirements?

PayAnalytics supports companies worldwide in their pay equity journey, whether they are just starting or have been conducting pay equity audits for years. It’s a global solution adaptable to all primary regulatory environments, including Maryland’s.

With PayAnalytics, Maryland employers can easily:

• Get a comprehensive overview and in-depth understanding of their current salary structure. 
• Create a framework to compare different jobs and employee characteristics based on standard and objective criteria.  
• Conduct a pay equity analysis and measure and monitor pay gaps by any demographic variable.
• Address any identified pay disparities, correct pay discrepancies, and close pay gaps by making the appropriate changes suggested by the software, while understanding the associated costs. 
• Gain valuable insights into pay practices and policies that may be contributing to pay disparities. 
• Formalize and document pay policies to better respond transparently to candidates’ or employees’ requests for compensation information. 
• Prevent pay disparities and sustain fair pay with ongoing decision support. 
• Proactively reduce the risk of non-compliance and minimize the cost of remediation by conducting regular pay equity assessments.
• Report and share pay equity information with a user-friendly, flexible reporting feature.

Sources:

• Equal Pay for Equal Work Act
• Amendment HB123
• Amendment HB 14