Expanded Maryland Equal Pay Act Including Pay Transparency Effective October 1st

Maryland’s existing Equal Pay act prohibits employers from discriminating against employees of one sex who work in the “same establishment” and perform similar work by paying a lower wage than an employee of another sex.

Earlier this year, Maryland Governor Larry Hogan signed into law the Equal Pay Act for Equal Work Act which amends the existing Equal Pay act.

Beginning October 1, 2016 there are significant changes being made for all Mmd-postaryland employers. These changes include:

  • Expanding protections against pay differentials based on gender identity as well as sex;
  • Prohibiting employers from “providing less favorable employment opportunities” based on gender identity or sex, such as directing employees into a less favorable career track or failing to provide information about advancement or promotions in the full range of career tracks offered by the employer;
  • Redefining “same establishment” to include all work sites of the same employer within the same county;
  • Adding exceptions for pay differentials based on “a bona fide factor other than sex or gender identity, including education, training, or experience,” or a system that measures performance based on quality of quantity of production. These exceptions are in addition to the existing exceptions for nondiscriminatory factors, including seniority, merit increase systems, shift differentials and differences in job responsibilities.

In addition, the new Act includes a pay transparency provision which prohibits an employer from taking adverse action against an employee for any of the following:

  • discussing their own wage;
  • inquiring about another employee’s wage;
  • discussing another employee’s wages (unless the employee was informed of the other employee’s wage through their regular job duties, such as that of a payroll or HR employee);
  • asking the employer to provide a reason as to the employee’s wage; or
  • encouraging or aiding another employee to exercise their rights under this law.

Under the Act, employers are prohibited from requesting or requiring employees to sign a waiver of their rights to discuss wages.

Employers can implement a written policy, which must be distributed to all employees, which defines reasonable limitations on the place, time and manner of discussions regarding compensation. Employers can discipline employees who do not follow this written policy.

Employers are still permitted to prohibit employees from disclosing proprietary or trade secret information.  Employees also do not have the right to provide wage information to a competitor of the employer.

Employers with employees in Maryland are encouraged to review their compensation policies to ensure compliance with the expanded Act.