The Maryland 2016 legislative session endedshadow-dollar-sign-1239535 on Monday.  A friend of mine mentioned that she heard the General Assembly passed an equal pay law in Maryland. But guess what? There is already an Equal Pay for Equal Work law in Maryland – it’s been in place for almost 25 years!! The current law already prohibits employers from discriminating against employees of one sex who work in the “same establishment” and perform work of comparable character or work in the same operation, in the same business, or of the same type by paying a lesser wage than an employee of another sex.

The equal pay bill mentioned, House Bill 1003, expands the prohibitions on discriminatory pay practices. It also adds an entirely new pay transparency provision. Specifically:

Amendments to Prohibition on Discriminatory Pay Practices

  • The bill adds that discriminatory pay practices cannot be on the basis of gender identity, in addition to sex. (Of course, if you’re the EEOC, you already think that sex includes gender identity, as we discussed in an earlier blog post, “EEOC Says Gender Identity and Transgender Status Protected by Title VII.”)
  • It also adds that employer may not discriminate by “providing less favorable employment opportunities based on sex or gender identity.” This is defined as:  (1) assigning or directing the employee into a less favorable career track (if career tracks are offered) or position; (2) failing to provide information about promotions or advancement in the full range of career of career tracks offered by the employee; or (3) limiting or depriving an employee of employment opportunities that would otherwise be available to the employee but for the employee’s sex or gender identity.
  • “Same establishment” will now include separate workplaces located in the same county of the state.
  • The current law establishes some exceptions to account for legitimate variations in wages, such as seniority systems, merit increase systems, shift differentials, and jobs that require different abilities or skills. The amendments add to that list:  (1) a system that measures performance based on a quality or quantity of production; or (2) a bona fide factor other than sex or gender identity (including education, training or experience), provided that the factor is not based on or derived from a gender-based differential in compensation, is job related and consistent with business necessity, and accounts for the entire differential.

Amendments Adding Pay Transparency Provisions

  • The bill makes it unlawful for an employer to:
    • prohibit an employee from asking about, discussing or disclosing his/her own wages or that of another employee or asking for a reason for the amount of his/her wages;
    • require the employee to sign a waiver of his/her right to disclose or discuss his/her wages;
    • take adverse action against an employee for asking about, discussing or disclosing wages, asking for a reason for the wages, or aiding or encouraging another employee’s exercise of these rights.
  • Employers are permitted, however, to have a written policy establishing reasonable workday limitations on the time, place and manner for discussions of wages, and may discipline employees for violating that policy.
  • The prohibition against not allowing employees to discuss wages does not apply to an employee who, as part of that employee’s job functions has access to the wage information of other employees (i.e. a Payroll, HR or IT person) and learns the wage information through that channel.
  • The employer can still prohibit disclosure of proprietary information, trade secret information, or other information that is otherwise subject to a legal protection or protected by law, as well as prohibit disclosure of wage information to a competitor of the employer.

(If you think that these pay transparency amendments sound familiar, you would be correct!  Under the National Labor Relations Act, it is already an unfair labor practice for employers (including those who are not currently unionized) to prohibit employees from discussing wages.  In addition, these provisions will also be familiar to government contractors – Executive Order 13665, the Pay Transparency Order, signed by President Obama in 2014 and effective January 11, 2016, provides essentially the same protections.)

Amendments to Remedies and Damages

  • The standard for establishing a violation under the bill is whether the employer “knew or reasonably should have known that the employer’s actions” violated the statute.
  • If an employer pays different wage rates and is not able to rely on a legitimate reason to account for the variance, then an employer can be subject to injunctions and could be required to pay the difference in wages.
  • If an employer violates the provisions about prohibiting employees from disclosing wages, then the employer could be subject to an injunction and actual damages, as well as, an additional amount of equal damages as liquidated damages.
  • The statute of limitations for bringing an action would be 3 years from the date that the employee receives the wages paid on the termination of employment.

Governor Hogan has not yet indicated whether he will sign the bill.  If he does, the law will become effective on October 1, 2016.

I also wanted to mention that the General Assembly also passed another bill, HB 1004, that establishes an Equal Pay Commission. This commission will submit annual reports on equal pay issues to the Governor starting on December 15, 2017. But what is curious about this Commission is that the General Assembly previously established an Equal Pay Commission back in 2004, which issued a report in 2008. But according to the Maryland Department of Licensing and Labor Regulation, “no real conclusions” could be drawn from the 2008 report due to limited data available. Well, here’s their second bite at the apple!