In the midst of the COVID-19 pandemic, it was a tumultuous session for the Maryland General Assembly, whose 2021 session ended at midnight on Monday, April 12. Among the many bills that passed, there were a number of significance to employers, including protection for essential workers in a catastrophic public health emergency, bereavement leave, workplace peace orders, an extension of the time in which to file complaints of discrimination with the Maryland Commission on Civil Rights, modifications to the mass layoff law, and requirements for gender diversity on boards and in executive management in order to qualify for certain state benefits, among other things.
These bills await action by Governor Hogan, who could sign them into law, veto them, or allow them to become law without his signature. At this time, we do not anticipate any vetoes. Assuming that they become law, emergency legislation will take effect immediately, and the remaining bills will take effect on October 1, 2021.
The Essential Workers Protection Act (HB581/SB486). This session, the General Assembly was determined to pass legislation related to pandemic protection for essential workers. As originally drafted, the EWPA bill incorporated an incredibly broad definition of an “emergency” as well as of essential employers and workers. It also included onerous provisions for hazard pay, extensive emergency leave, health benefits, specific and expanded workplace safety standards, and more. Business groups, including the Maryland Chamber of Commerce, mobilized to express the concerns of employers. A workgroup that included representatives from the General Assembly’s House and Senate, as well as both employee and employer interest groups, was created to work through the provisions. In the end, a much-streamlined version of this emergency bill passed and will take effect immediately upon signature by the Governor or its enactment without signature.
As passed, the EWPA provides for the following:
- Defines “emergency” as a catastrophic health emergency as declared by the Governor and related to a communicable disease.
- Defines “essential worker” as one whose work cannot be performed remotely and whose work the essential employer determines to be essential or critical to its operations.
- Permits the governor or a federal or state agency to define “essential employer” in the context of the future emergency.
- Requires essential employers to provide working conditions that comply with safety standards set forth by a federal or state agency, to provide and implement other safety and health measures or requirements set forth by these agencies or the governor, and to post written protocols to educate workers regarding the applicable safety standards.
- Further requires such employers to provide protective equipment, subject to availability.
- Allows an essential worker to refuse to work in accordance with already-existing standards governing such refusal.
- If a worker has contracted the communicable disease in question, requires an essential employer to take actions to minimize risk of transmission, including by notifying other workers of possible exposure.
- Requires an essential employer to pay for the costs of testing if the worker’s insurance or other benefits do not cover such testing, or it is not otherwise available for free. The employer must also report anonymized positive test results to the Maryland Department of Health.
- Provides up to 112 hours of paid public health emergency leave per essential worker, in addition to any existing paid leave, but only if there is federal or state funding for such leave. The worker would be able to take such leave for the following reasons related to the communicable disease: to isolate due to a diagnosis or symptoms; to obtain a diagnosis, preventative care or treatment; to care for a family member diagnosed with the disease; by order of a public health official or health care professional because of the worker’s exposure to or symptoms of the disease; to care for a family member who has been so ordered; to care for a family member whose care provider is unavailable or whose school/place of care has been closed because of the emergency. The definition of a “family member” is the same as under the Maryland Healthy Working Families Act. Employers may prohibit the improper use of the leave, and may require documentation of the need for leave.
- Prohibits employers from misclassifying workers as independent contractors in order to avoid paying the required benefits.
- Provides that workers who believe their employer has violated the EWPA may complain to the Commissioner of Labor and Industry, who has the authority to investigate and order penalties and remedial action.
- Within two weeks of the effective date of the EWPA, requires the Secretary of Labor either to adopt any Emergency Temporary Standard issued by the federal Occupational Safety and Health Administration or, if no such standard has been issued, adopt a state standard that meets the requirements of OSHA’s January 29, 2021 “Guidance on Mitigating and Preventing the Spread of COVID–19 in the Workplace.”
The Secretary of Labor is to issue regulations to implement this Act. The EWPA specifies that it applies only prospectively. However, it also states that, in the context of the current COVID-19 pandemic, essential employers must provide the required paid leave on the date that funding is made available to them. This suggests that essential employers who are covered by the voluntary extension to the Families First Coronavirus Response Act (as discussed in our March 12, 2021 E-lert) may actually be required to provide such leave to their essential workers once the Act takes effect. However, such employers must be identified by the Governor or a state or federal agency as critical to remain in operation during the emergency. Although the Governor has issued executive orders identifying those businesses included in the federal critical infrastructure sectors, it is unclear if this suffices as such an identification under the Act. Further guidance from the State is required.
Bereavement Leave (HB56/SB473). This bill does not grant a new bank of leave, but rather amends the Maryland Flexible Leave Act to require employers with 15 or more employees to permit the use of any existing accrued paid leave for bereavement purposes. The Maryland Flexible Leave Act, which had become less significant with the implementation of the Maryland Healthy Working Families Act (mandatory paid sick leave), enables employees to use any earned paid leave – such as vacation, sick, PTO, or compensatory time – to care for an injured or ill spouse, parent or child under the age of 18 or incapable of self-care because of a disability. These relationships encompass those that are biological, adopted, foster, step, legal ward, or – for parents only – in loco parentis (meaning acting as a parent, regardless of the legal relationship). This amendment now allows employees to take that accrued paid leave – in the order of their choice – in the case of the death of a spouse, parent or child of any age. The employer cannot take any adverse action against an employee who has used or requested such leave, opposed any unlawful practice, reported a violation or participated in a proceeding under this law.
Peace Orders – Workplace Violence (HB289/SB105). 20 years in the making, the bill modifies the existing peace order process to permit an employer to petition a court for a peace order (i.e. a restraining order) on behalf of an employee based on acts or threatened violence against that employee in the employer’s workplace. The peace order may be issued on an interim, temporary, or final basis. An employer must notify the employee before seeking such a peace order. The bill provides that an employer will not be liable for failing to file for a peace order, although this provision will sunset after two years. The bill also protects the employee from retaliation by the employer for refusing to provide information or testify in support of the petition.
Extended Time for Filing Discrimination Complaints (HB290/SB455). Currently, employees, interns, and independent contractors have 6 months in which to file a complaint of discrimination with the Maryland Commission on Civil Rights (MCCR). This bill extends that period to 300 days, which is the same time period applicable to filing charges of discrimination under federal law. Given that complaints of discrimination filed with either the MCCR or the federal Equal Employment Opportunity Commission are automatically cross-filed with the other, this change conforms the State law to the federal. Employers should note, however, that under a 2019 amendment to State law, harassment complaints to the MCCR are subject to a longer filing period – two years, although the federal period for EEOC harassment charges remains 300 days.
Economic Stabilization Act (Mini-WARN) Revisions (HB1154/SB801). Similar to the federal Worker Adjustment and Retraining Notification Act, Maryland has a law providing for certain notifications to employees in the case of a mass reduction in operations. Although the compliance was previously voluntary, it was made mandatory in 2020, as discussed in our March 2020 E-Update. Because the state law differed from federal law in many significant respects, the Maryland Chamber of Commerce proactively sought legislative changes to better conform the state law to the federal law. One of our attorneys, Paul D. Burgin, was instrumental in this process by developing proposed language for the amendments and testifying on behalf of the Chamber in favor of the bill.
Maryland’s mini-WARN applies to employers with at least 50 employees operating an industrial, commercial or business enterprise in the State for more than one year. It is triggered by a reduction in operations, meaning either:
- the relocation of part of its operation from one workplace to another, which the bill clarifies may result in the reduction of the total number of employees by the greater of at least 25% or 15 employees; or
- the shutting down of a workplace or a portion of its operations that reduces the number of employees by the greater of at least 25% or 15 employees over a 3-month period.
The count of impacted employees does not include those working less than an average of 20 hours a week, or who have worked less than 6 of the preceding 12 months, or (as added by this bill) who have accepted within 30 days an offer of transfer to another employment site. A “workplace” is defined as a factory, plant, office or other facility where employees produce goods or provide services, but does not include construction sites and temporary workplaces.
The law also exempts the following types of reductions in operations by private employers: resulting solely from labor disputes; occurring at construction sites or other temporary workplaces (redundantly); resulting from seasonal factors customary in the industry (as determined by the state Department of Labor); or resulting from an employer’s bankruptcy.
Under the bill, an employer must give a 60-day written notice prior to a reduction in operations to:
- All employees at the workplace that is subject to the reduction in operations, including those working on average less than 20 hours a week and those who have worked less than 6 months during the prior 12-month period;
- Any representative or bargaining agency representing those employees (i.e. a union);
- The state Dislocated Worker Unit; and
- The chief elected official (instead of all elected officials) in the jurisdiction where the affected workplace is located. If the workplace is in more than one jurisdiction, then notice is given to the chief elected official in the jurisdiction where the employer paid the most taxes in the preceding fiscal year.
The required notice must include:
- The name and address of the affected workplace;
- A company official’s name, telephone number and email address to contact for further information;
- A statement explaining whether the reduction in operations is expected to be temporary or permanent (meaning that the employer has not entered into a written agreement to resume operations within three months of the reduction), and if the workplace is expected to shut down; and
- The expected date the reduction in operations will begin.
Significantly, the bill adopts some – but not all – of the federal exceptions to the notice requirement. Thus, an employer need not provide 60 days’ notice if:
- It was actively seeking capital or business that would have enabled the employer to avoid or postpone the reduction, and it believed that providing such notice would have precluded it from obtaining the capital or business; or
- The reduction in operations was due to a natural disaster (e.g. flood, earthquake or drought).
Under those circumstances, notice must still be given as soon as practicable, along with a brief explanation of why it was not provided 60 days before the reduction. Unfortunately, particularly in light of the pandemic, the General Assembly declined to adopt the federal exemption for business circumstances that were not reasonably foreseeable 60 days before the reduction.
The bill also addresses notice in the context of a reduction in connection with the sale of a business, specifying that it must be given both by the seller on or before the effective date of the sale and the purchaser after the date of the sale. In addition, it asserts that an employee of the seller becomes an employee of the purchaser upon the sale, meaning that there has been no employment loss for that employee.
If there is a violation, the Secretary can issue an order compelling compliance and may assess a discretionary civil penalty of up to $10,000 per day. The following factors will be considered in determining the amount of the penalty: the gravity of the violation, the size of the business, the employer’s good faith, and the employer’s history of prior violations. The Commissioner’s penalties shall be subject to notice and hearing requirements.
The law further directs the Secretary of Labor, in cooperation with the Workforce Development Board, to develop mandatory guidelines regarding the required written notice and the continuation of benefits, such as health, pension, and, of particular concern, severance. (New Jersey recently amended its mini-WARN act to require the payment of severance). The Department of Labor had held off on issuing such regulations in light of the potential changes to the law set forth in this bill, but should move forward with those regulations in the coming year.
Expansion of Prevailing Wage Requirements (HB37/SB35). State public works construction contractors and subcontractors must pay employees a statutory “prevailing wage” rate. The bill makes this rate applicable to more contracts, by lowering the triggering percentage of State money on the contract to 25% from the current 50%, and reducing the contract threshold amount to $250,000 from $500,000.
Increased Wage Rate at Heightened Security Locations (HB685/SB107). In order to promote public safety by attracting experienced and trained employees at “heightened security interest locations,” defined as BWI Airport and Baltimore Penn Station, certain employers must provide an enhanced wage rate to their covered non-exempt employees. Covered employees do not include those performing work at retail establishments, food service facilities, or motor vehicle rental operations, and covered employers do not include construction services or airlines. All other employers must pay their non-exempt employees working at least 50% of their time at a heightened security interest location in accordance with the following schedule:
|Effective Date||Minimum Hourly Wage Rate|
|January 1, 2022||$13.50|
|January 1, 2023||$14.25|
|January 1, 2025||$15.00|
|January 1, 2026||$16.00|
In addition, beginning January 1, 2026, the employer must also pay a $1.00 per hour supplement benefit rate that may be applied to the employee’s share of benefit costs (not including paid leave), paid in cash, or a combination.
Employers may not take a tip credit on any covered employees receiving tips if their duties include providing passengers with wheelchair assistance. Such employees will be permitted to retain all tips.
There are also notice posting and record retention provisions. The Commissioner of Labor and Industry is authorized to review those records and question employees to ensure compliance. The bill provides employees with the ability to file suit for violations.
Webinar: Complying with Maryland’s New Employment Laws. We will be holding a complimentary webinar on Thursday, April 29, 2021 at 1:00 p.m. Eastern to explain further the obligations and requirements of these new laws, and to provide guidance on compliance. You may register for the webinar here.