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1

GENERAL PRINCIPLES

Forums For Adjudicating Employment Disputes

Certain claims can be asserted before the Maryland Department of Labor. Most claims can be asserted in courts of general jurisdiction although certain claims, such as discrimination claims, must be first presented to the appropriate administrative agency. In addition to litigation, disputes also may be mediated or arbitrated before a state or federal court, a state or federal agency, or a private mediator or arbitrator.


The Main Sources Of Employment Law

Employment arrangements in Maryland are governed by general common law principles of contract law, but there are common law and legislative requirements that over-ride those general principles in some instances. Individual contracts (whether written or oral), collective bargaining agreements and, in some instances, employee handbooks can form part of the contractual relationship.


National Law And Employees Working For Foreign Companies

Federal law, state common law and state statutes apply to all individuals physically working in the state, regardless of employees’ nationality and regardless of the law governing their employment contract, although in certain narrow instances a national treaty with a foreign government may pre-empt the application of national law. The parties may by contract agree to apply the law of another state in some circumstances (e.g., the state of incorporation of a company).


National Law And Employees Of National Companies Working In Another Jurisdiction

Federal law applies to all employees working in the United States and, in some circumstances, to employees outside of the United States for United States based companies. Maryland law applies only when the employee is physically working in the state or when both parties have agreed in writing to the application of Maryland law.


Data privacy

Maryland's law on username and privacy protections prohibits employers from requesting or requiring that an employee or prospective employee disclose login information accessing any personal account or service through an electronic communication device.

Maryland's Personal Information Protection Act provides security and deletion requirements and imposes data breach notification obligations on Maryland businesses that process 'personal information' as defined in the statute, such as social security numbers and driver's license number.

2

HIRING THE EMPLOYEE

Legal Requirements As To The Form Of Agreement

There are no requirements as to the form of an agreement to hire. An employment agreement can be written or oral.


Mandatory Requirements
  • Trial Period

    • Maryland does not require that employers provide an introductory, trial or probationary period at the start of employment.

  • Hours Of Work

    • The state does not impose maximum working hours on employers, but a “non-exempt” employee, as defined by federal or state statute, who works more than 40 hours per week must be paid overtime. The overtime requirement does not apply to “exempt” employees, including executive, professional, administrative and outside sales employees who earn a salary of at least $684 per week and other employees as described by statute.

  • Special Rules For Part-time Work

    • There are no special rules for part-time work. Employers must pay “non-exempt” employees for all hours worked regardless of number of hours worked, including for overtime as applicable.

  • Earnings

    • In Maryland, minimum wage requirements are applicable to all employees.

    Failure to pay timely wages may in many cases result in an employer being required to pay the unpaid wages, treble damages and attorneys’ fees of the employee. Most employers are required to pay the higher of federal minimum wage or the state minimum wage. The current federal minimum wage is $7.25 per hour and Maryland’s is $11.75 per hour. Some employees, such as executives, administrative, and professional employees, are exempt from minimum wage requirements. The minimum wage is set by the legislature and revised from time to time by amendment to the applicable federal or state statute.

  • Holidays/Rest Periods

    • Employees are not entitled to holiday leave. Most employees are not legally guaranteed rest or meal periods. Certain retail employees must be provided rest breaks ranging from 15-45 minutes, depending on the length of the shift. Maryland law also requires employers to provide employees under the age of 18 with a 30-minute break for every 5 consecutive hours of work.

  • Minimum/Maximum Age

    • The normal minimum age is 14 (which can be varied in certain cases). Different rules (e.g. on working time) apply to children or young workers. There is no maximum working age.

  • Illness/Disability

    • Most Maryland employees are entitled to paid sick and safe time. Employees generally accrue one (1) hour of this paid leave for every thirty (30) hours worked. Employees can accrue up to 40 hours of sick and safe leave a year. Employees can carryover up to 40 hours of unused time to the following calendar year, but accrual will be capped at 64 hours. The law contains additional provisions regarding permitted use, notice, documentation and non-retaliation. Sick and safe leave does not have to be paid out upon termination. Montgomery County, Maryland has a separate sick and safe leave law as well.

    Under Maryland’s Flexible Leave Act, employees may also use available and accrued time under a company’s Vacation or Personnel time off policies as flexible leave time to care for an immediate family member (child, spouse or parent) who is ill.

    Federal and state law impose specific requirements to accommodate employees with a disability, including providing unpaid leave in certain circumstances. Federal law also requires certain employers to provide unpaid leave to eligible employees with a serious medical condition, who are caring for an immediate family member with a serious medical condition or who are caring for an injured military service member. Employees may have the right to use accrued paid time off during unpaid leave.

    Most Maryland employers are also subject to Maryland’s Reasonable Accommodation for Disabilities Due to Pregnancy law, which requires employers to consider a variety of accommodations for eligible employees. Employers must maintain a written policy about the law and its protections in an employee handbook for example.

  • Location Of Work/Mobility

    • No specific requirements. Employers can require employees to work in different locations at any time.

  • Pension Plans

    • Requirements relating to pension plans are established by federal law. Employers may or may not contribute to pension plans on behalf of employees, depending upon the terms of the pension plan.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)

    • There are non-discrimination and leave requirements for pregnancy.

    The Family Medical Leave Act is a federal law allowing for 12 weeks of unpaid leave to eligible employees for the birth or adoption of a child.

    Maryland’s Parental Leave Act applies to employers with 15-49 employees and requires employers to provide eligible employees with up to six (6) work weeks of unpaid Parental Leave during any 12-month period for the birth of the employee’s child or the placement of a child with the employee for adoption or foster care. State law also requires that employers who provide leave with pay to an employee following the birth of the employee's child shall provide the same leave with pay to an employee when a child is placed with the employee for adoption.

  • Compulsory Terms

    • State law mandates that employees must be advised as to when they will be paid and that employees must be paid for all hours worked. Maryland employers must also advise employees in writing at the time of hiring if unused vacation leave will be lost or forfeited upon termination; otherwise employees are entitled to the cash value of unused accrued vacation leave upon departure.

  • Non-Compulsory Terms

    • The parties are free to agree to other non-compulsory provisions, although terms that are less favorable than those provided by state or federal law may not be enforceable.


Types Of Agreement

No particular form of agreement is required. Agreements may be oral or written. Where employees are in a union, a collective bargaining agreement governs the terms and conditions of those employees’ employment.

Employment in Maryland is generally “at will” meaning the employer can dismiss the employee at any time for any or no reason and with or without prior notice, as long as the employer is not terminating the employee’s employment for a reason that is unlawful (e.g., discriminatory, retaliatory, or based on the exercise of protected rights such as whistleblowing). No agreement is needed to establish “at will” employment; to the contrary, an employment agreement generally alters the “at will” nature of the employment relationship.

An employment agreement may be for a specific term of employment and can generally provide for other terms and conditions of employment that are mutually agreeable to the employer and employee.


Secrecy/Confidentiality

Whether or not an employee has a written agreement that provides an explicit provision relating to secrecy/confidentiality, the employee is under a common law duty to protect trade secrets and confidential proprietary information of the employer. Trade secrets are also protected under the Maryland Uniform Trade Secrets Act.


Ownership of Inventions/Other Intellectual Property (IP) Rights

In the absence of a written agreement between the parties, ownership of IP rights generally is determined by federal statute.


Pre-Employment Considerations

In Maryland, employers may consider an applicant's criminal history for the purpose of deciding whether or not to hire the applicant. However, employers may only consider an applicant’s felony or misdemeanor convictions (and may not consider summary offenses or arrests) and only to the extent such convictions relate to the applicant's suitability for employment in the position for which they have applied. If an employer decides not to hire an applicant based on their criminal record, the employer must so inform the applicant in writing. Maryland law prohibits employers from asking applicants about criminal charges that have been expunged as well.

Certain Maryland employers must comply with the Criminal Record Screening Practices Act, which establishes a statewide ban-the-box law prohibiting employers from requiring a job applicant to disclose information related to their criminal record, with limited exception, prior to an in-person interview. Baltimore City and several counties, such as Montgomery and Prince Georges Counties, have more restrictive ban-the-box- laws as well.

Maryland employers must also comply with Maryland’s Wage History and Wage Range Law, which regulates an employer’s actions regarding wage inquiries upon hiring and during employment. More specifically:

  • Employers are required, upon request from the applicant, to provide the wage range for the position for which the applicant applied.
  • Employers may not retaliate against or refuse to interview, hire or employ an applicant because the applicant requested the wage range for a position or otherwise refused to provide their own wage history.
  • Employers are prohibited from relying on an applicant’s wage information during screening or as a factor when considering an applicant for employment.
  • Employers are prohibited from seeking the wage history of an applicant for employment orally, in writing, through an employee or an agent, or from a current or former employer prior to initial offer and with limitations.
  • Employers may not use an applicant’s wage history to determine an initial compensation offer.

Finally, certain Maryland employers must also comply with the Job Applicant Fairness Act, which generally prohibits employers from using a job applicant or employee's credit report to determine: (1) whether to hire a job applicant; (2) whether to terminate an employee; or (3) the rate of pay or other conditions of employment for an employee. An employer covered by the law may use an employee or job applicant's credit history or credit report if the employer has a bona fide reason for requesting or using the information that is substantially job-related and disclosed in writing to the employee or applicant.


Hiring Non-Nationals

Employers are obliged by federal law to ensure that all employees are authorized to work in the US. Different requirements may apply depending on the nationality and immigration status of the individual concerned.

 

Hiring Specified Categories Of Individuals

There are restrictions on the types of work and work hours that children/minors can be required to undertake.


Outsourcing And/Or Sub-Contracting/Temporary Agency Work

There generally are no restrictions on an employer outsourcing or sub-contracting work unless a collective bargaining agreement contains such restrictions.

3

MAINTAINING THE EMPLOYEE RELATIONSHIP

Changes To The Contract

As already noted, employment in Maryland is generally “at will” meaning the employer and employee can end the employment relationship at any time for any or no reason and with or without prior notice. Most “at-will” employees do not have employment contracts and, as such, an employer can unilaterally change the terms and conditions of employment. If there is an employment agreement or a collective bargaining agreement, the terms of those agreements will control and changes to the terms of those agreements may only be made with the consent of both/all parties.


Change In Ownership Of The Business

Federal law requires that employers with 100 or more employees give employees 60 days prior notice (or 60 days’ pay) in the event of plant closings or mass layoffs that affect specific numbers of employees. Maryland’s Economic Stabilization Act contains very similar requirements, but applies to employers with 50 or more employees. Collective bargaining agreements or the presence of a union also can provide that the employer comply with other requirements when there is a change in the ownership of a business. Employment agreements, particularly those relating to company executives, may contain provisions, including potential severance pay, when a change in ownership occurs.


Social Security Contributions

Pursuant to federal law, there are mandatory social security contributions that must be made by both the employer and the employee.


Accidents At Work

Federal law requires employers to keep logs of all accidents at work. Maryland law requires employers to maintain insurance to provide compensation to employees who suffer workplace injuries to cover medical care, rehabilitation services and partial wage loss.


Discipline And Grievance

Maryland has no specific rules governing discipline and/or grievance procedures. If there is an applicable employment agreement or collective bargaining agreement, such agreements may provide guidelines and/or limitations on discipline and/or grievance procedures. Although not required, many employers provide non-contractual guidelines for the handling of disciplinary procedures in their employee handbooks.


Harassment/Discrimination/Equal pay

Federal and state laws recognize harassment as an offense where it relates to certain discriminatory factors. Employees are protected from discrimination and harassment on the basis of their sex, age, national origin, race, color, religion, disability, sexual orientation, gender identity, genetic information, protective hairstyles, marital status, an employee’s medical information and participation in group medical coverage, and veteran status. The concept of equal pay is recognized by federal and state legislation. Local ordinances prohibit discrimination based on a variety of other protected characteristics as well. The concept of equal pay is recognized by federal and state law.


Compulsory Training Obligations

There are no required state training obligations. Employers are still advised to train managers and employees on harassment (including but not limited to sexual harassment), discrimination and retaliation prevention, including how to raise an internal complaint of any such concerns. Depending on the industry, there may be required training.


Offsetting Earnings

State law prohibits deducting employee debts from employee earnings unless there is a specific written authorization by the employee for such a deduction. This should take the form of a separate and distinct statement, signed by the employee, concerning only the deduction and nothing more. In addition, federal and state law require the payment of at least minimum wage for all hours worked during all pay periods and offsets for employee debts may not result in a payment of less than minimum wage.


Payments For Maternity And Disability Leave

There are no mandated payments for disability leave but if an employer provides paid disability leave it must treat maternity leave the same as disability leave and pay pregnant employees while on maternity leave to the extent they are unable to work.


Compulsory Insurance

There are compulsory insurance requirements for employers, including workers’ compensation and unemployment insurance.


Absence For Military Or Public Service Duties

Both federal and Maryland law provide for leaves of absence for employees to provide military services for active duty in the U.S. armed forces and its reserve units, including the National Guard, and Maryland state forces. Maryland also provides leave for employees to spend with family members leaving for or returning from active overseas military duty. Employers generally are required to keep an employee’s job open/available while on military leave and reinstate employees upon their return from military service, which includes restoring their job position and benefits that they would have had if not for their military duty and leave. Employers are not required to pay employees while they are on military leave.

Maryland employees are permitted to take two (2) hours of paid leave to vote, so long as the employee does not have two (2) hours of continuous off-duty time while the polls are open. Employees may be required to show their employer proof that they voted.

Under federal and state law, employers cannot terminate or retaliate against an employee for missing work time as a result of going to court for jury service. Maryland employers also cannot require an employee to use leave (annual, sick or vacation) for jury service.


Works Councils or Trade Unions

Under federal law, employees can force an employer in certain cases to recognize a union by petitioning for and winning an election by majority vote. Individuals who are involved in activities to promote a union are protected from adverse employment actions, such as dismissal, because of their union-promotion activities.


Employees’ Right To Strike

Under federal law, groups of employees may strike, even if there is not a collective bargaining agreement or formal union at the site of employment, subject to limits for public service employees.


Employees On Strike

Employers may not typically terminate employees on strike unless the employees engage in serious misconduct while on strike or the strike was unlawful and unprotected. However, if employees are on an economic strike, they may be permanently replaced by the employer and may be denied reinstatement if there are no open positions at the end of the strike and until appropriate positions become available.


Employers’ Responsibility For Actions Of Their Employees

Employers are responsible under common law agency principles for actions of their employees that occur within the scope of their employment. Employers generally are not responsible for employees’ actions outside the scope of their employment. Maryland employers may be liable for harassment by supervisory/management employees.

4

FIRING THE EMPLOYEE

Procedures For Terminating the Agreement

There are no required procedures for terminating an employee’s employment unless specified in a collective bargaining agreement or a contract of employment.


Instant Dismissal

As noted above, employment in Maryland is generally “at will” meaning the employer can dismiss the employee at any time for any or no reason and with or without prior notice, as long as the employer is not terminating the employee’s employment for an unlawful reason (e.g. discrimination, retaliation, in connection with the exercise of protected rights such as requested certain leaves, or whistle-blowing). A collective bargaining agreement or an employment contract can alter the “at will” nature of the employment relationship and include limitations on the dismissal of an employee.


Employee's Resignation

“At will” employment also means that an employee can resign employment at any time for any or no reason with or without prior notice. Employment contracts can provide for notice requirements.


Termination On Notice

As noted above, notice is not typically required for termination of employment, unless required by a written contract. Under federal and Maryland law, some workers must be given 60 days’ notice in the event of certain plant closures, mass layoffs and/or transfer of operations.


Termination By Reason Of The Employee's Age

Generally employment cannot be terminated because of the employee’s age.


Automatic Termination In Cases Of Force Majeure

Employment agreements may be terminated in cases of force majeure, though such occasions are rare.


Collective Dismissals

Federal law requires that employers with 100 or more employees give employees 60 days’ prior notice (or 60 days’ pay) in the event of plant closings or mass layoffs that affect a certain threshold number of employees. Maryland’s Economic Stabilization Act contains very similar requirements, but applies to employers with 50 or more employees.

For layoffs involving more than one employee, employers wishing to obtain a release of federal age discrimination claims must follow specific requirements, which include providing information about other employees considered for layoff in the “decisional unit” and a 45-day consideration period for the employee to decide whether to agree to release the claims.


Termination By Parties’ Agreement

The parties can agree to terminate employment at any time by agreement.


Directors Or Other Senior Officers

There are no specific requirements for the dismissal of a director or senior officer, although an applicable employment agreement may provide otherwise. Termination of the employment of a director generally does not automatically end the director’s board membership. Separate steps, as may be required by a company’s by-laws or articles of incorporation, may need to be considered in order to end a director’s term.


Special Rules For Categories Of Employee

There are no special rules for certain categories of employees relating to termination, other than those already discussed above.


Whistleblower Laws

In addition to general non-retaliation prohibitions in various Maryland employment-related laws, the Maryland Healthcare Worker Whistleblower Protection Act protects licensed or board-certified health care workers who report, in writing, to a supervisor or administrator, what they reasonably and in good faith believe to be a violation of law, rule or regulation that posed a specific and substantial danger to public health or safety.

Maryland also provides specific whistleblower protections for State contractor and public school employees.


Specific Rules For Companies in Financial Difficulties

Federal law requires employers with 100 or more employees to provide 60 days’ prior notice in the event of a plant closings or mass layoffs affecting specific numbers of employees. Exceptions to the notice requirements exist when the layoffs result from closure of a faltering company or unforeseeable business circumstances.


Special Rules For Garden Leave

There are no special rules for garden leave in Maryland.


Restricting Future Activities

Maryland prevents employers from entering into non-compete agreements with low-wage workers, even if the parties entered into the agreement in a different state. Maryland law restricts an employer from obstructing the "ability of an employee to enter into employment with a new employer or to become self-employed in the same or similar business." However, this restriction does not cover non-compete agreements that restrict employees from using proprietary data or client lists. This Maryland restriction applies to any employee who earns up to $15.00 an hour or $31,200 a year or less. Any non-compete agreement that violates the law is deemed null and void.

Otherwise, the parties can agree to restrictions on future activities. State law requires that such agreements must be supported by consideration, such as entering into employment or continuing employment. Post termination, courts will review the restrictions to ensure that they are reasonable and drafted narrowly. Each case is considered on its own facts, so what might be appropriate for one employee in a particular instance may be unreasonable for another.


Severance Payments

Severance payments are not required unless the employer has a severance policy or the employee has an employment contract providing for severance. There are specific federal and state rules governing the validity of a release provided in exchange for severance.


Special Tax Provisions And Severance Payments

Severance payments are taxable income to an employee and subject to income, social security and other regular employment taxes.


Allowances Payable To Employees After Termination

There are no specific allowances that an employer is required to pay to an employee after termination of employment. Severance pay is not required, unless an applicable employment agreement or collective bargaining agreement so provides. Employers must pay employees their final pay checks (for all time worked through an employee’s last day of work) by the employer’s next scheduled payday.


Time Limits For Claims Following Termination

There are time limits for claims following termination. The time limits (statutes of limitation) vary depending on the claim. Discrimination, harassment and retaliation claims generally must be raised within 300 days under federal law and within 6 months under Maryland law.

5

GENERAL

Specific Matters Which Are Important Or Unique To This Jurisdiction

Conditioning performance-related incentive pay or bonuses on continued employment is in violation of Maryland’s Wage Payment and Collection Law. The law requires employees receive all remuneration for work performed, regardless of any ensuing termination of employment.



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Carla N. Murphy
Duane Morris LLP
United States


Marc J. Scheiner
Duane Morris LLP
United States


Disclaimer:

© 2021, Duane Morris LLP. All rights reserved by Duane Morris LLP as author and the owner of the copyright in this chapter. Duane Morris LLP has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021