During the 2016 Legislative session, the Maryland General Assembly passed the “Equal Pay for Equal Work” bill with a 103-33 vote in the House of Delegates and 32-13 vote in the Senate. This bill was pushed by many liberal leaning groups including the Maryland affiliate of the Working Families Party. Last month, Governor Larry Hogan signed the bill into law. While this bill was cheered on by progressive activists, it was also strongly opposed by business activists including the Maryland Chamber of Commerce. The obvious question for business owners is: How could this bill impact my business? Before the bill goes into effect on October 1, 2016, here are some things you should know.
Expanded and Strengthened Prohibitions on Discriminatory Pay Practices
Currently, the National Labor Relations Act in federal code covers many of the discriminatory pay provisions. The Equal Pay for Equal Work law builds on that act and expands on it. Here are some of the expanded protections for employees under the new law:
Added Protection on the Basis of Gender Identity
The new law specifically mentions that employees may not discriminate against employees based on their “gender identity.” Previously, law had only referenced sex and not identity. The Maryland Fair Employment Practices Act (FEPA) definition for identity was used for the new law.
Expands the definition of “same establishment”
All employer locations within the same county now all constitute the “same establishment” in the new law in pay discrimination cases. This rule change was made to ensure restaurant establishments or similar chains were not discriminating across locations in a similar area.
Stops Employers from Providing “less favorable employment opportunities” Based on Gender or Sex
According to supporters of the law, many businesses would assign or direct an employee into a less favorable career track or offer them less hours than another employee, which would hinder promotion track. This section also could punish businesses if they do not provide clear information on career advancement to all employees.
The new law makes it very clear that all employees are allowed to discuss their pay with other employees, ask why their wage is set the way it is, and prohibits employers from forcing an employee to sign a nondisclosure agreement regarding pay. Employers can have a written policy to discuss the time, place, and manner for such discussions such as one that requires employees to discuss wages during off-duty hours.
Employees are now given significantly more time to file a claim and will subject employees to injunctive relief as well as liquidated damages. Employees now have three years from the date on which they received their final paycheck to file a claim.
Potential Business Changes Required by the Equal Pay for Equal Work Law
To summarize, these businesses may be impacted by the bill:
- Businesses with multiple locations in the same county and wide ranges in pay
- Businesses with an existing policy against discussing wages with fellow employees
- Businesses that had previous complaints against supervisors on the basis of gender identity
- Businesses that offer over-time or advancement opportunities that significantly skew towards one gender or sex
If you are a business owner that is worried that this new law may impact you, it is recommended that you reach out to an attorney to prepare against potential lawsuits.
Here at Blackford & Flohr, we have attorneys who can help with these kinds of cases. Please contact us today for a consultation or give us a call at (410) 647-6677.
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