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Maryland Legislators Considering Bills to Restrict Pre-Employment Salary Inquiries

In January, Maryland lawmakers proposed H.B. 398 and S.B. 404 to amend Maryland’s Equal Pay Act.  The Act, codified at Md. Code Ann., Lab. & Emp. § 3-301 et seq., generally prohibits discrimination in pay based on sex or gender identity for employees who work in the same establishment and perform similar jobs or work on the same operation, in the same business, or of the same type.  Under § 3-304.1 of the Act, employers are generally barred from limiting employees’ discussions about wage information and from taking retaliatory actions against employees exercising their rights under the section.

Legislation pending in the Maryland General Assembly would amend the Equal Pay Act to prohibit employers of 15 or more employees from inquiring into an applicant’s salary history.  The legislation would also impose new disclosure requirements on such employers.

First, the legislation would require applicable employers to disclose certain information in job announcements recruiting employees or independent contractors for positions within their organizations.  Specifically, each employer would be required to include: (1) the minimum rate of pay for the position; (2) the method of calculating pay, e.g. by hour, shift, day or week, if the position is salaried or commissioned, if pay is by piece, or by any other method; (3) whether the position is eligible for overtime pay and if so, how such overtime pay would be paid; and (4) whether the employer plans to claim any allowances, such as a tip credit or meal and lodging allowance.  Additionally, employers would be bound to pay no less than the minimum rate included in the job announcement to the employee hired to fill that position.

Next, the section would prohibit employers from seeking an employee’s salary, compensation and benefit history information.  Employers would also be restricted from screening an applicant’s salary, compensation and benefit history information in several ways.  First, employers would be prohibited from requiring salary history information to satisfy a minimum or maximum requirement.  Second, employers would be barred from seeking salary history information as a condition of being interviewed, for continuing to be considered for a position, for an offer of employment, or for an offer of compensation.

Finally, the section would permit employers to seek an applicant’s salary history in limited circumstances.   For the sole purpose of confirming salary history, an employer could seek salary history information if (1) the employer has made an offer of employment with specific compensation to that applicant and (2) the applicant has authorized the employer to seek his or her salary history information.  Additionally, unless a prospective employer seeks salary history information under these circumstances, an employer would be prohibited from providing salary history information of a current or former employee to a prospective employer.

The proposed legislation is considered to have a reasonably good chance of being signed into law.   If passed, the amendment would become effective October 1, 2017.  As a result, affected employers should begin to think of the steps they will need to take to ensure they are in compliance with the new requirements.

 

 

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