Is Maryland a Right-to-Work State? Plus, New Employment Laws Every Maryland Business Owner Should Know About
[Updated August 2024]
Many Maryland business owners are not familiar with the federal and state laws that regulate their hiring practices, including the concept of 'at will employment'. Too many of these employers go on to violate some or all the labor laws, which can lead to legal problems. This is why it is so important for them to have a business attorney at hand who can help them out.
An experienced Maryland business attorney guides you through each step without violating any law or regulation, making sure that your company complies with everything from employee compensation rules and regulations regarding taxes and benefits such as health insurance plans, paid time off policies, and more. They will also make sure that they stay up-to-date on any changes in the law affecting your workplace environment.
In addition, an attorney will provide you with expert advice for drafting employment contracts as well as severance agreements for terminated employees. These documents lay out what both parties agree upon should something happen during the termination.
Maryland Is an "At Will" Employment State
"At-will" employment allows employees to leave their jobs for no reason or for any reason. An at-will employee is free to accept a better job without worrying about being bound by an employment contract. However, Maryland employers enjoy the same benefits. An employer can terminate an employee for any reason or no reason at all, including being late, having a negative attitude, and complaining about their jobs. Therefore, employers can fire someone who is underperforming and fill the vacancy with a more qualified candidate.
The fear of being fired may encourage employees to perform their jobs at maximum capacity. However, at-will employment can also create distrust and fear between employees and employers. For that reason, some employers and employees prefer an employment contract to an "at-will" employment relationship.
Maryland may be an at-will employment state, but that does not mean there are no exceptions to the general rule. Exceptions include:
Employment at will only apply to an employment relationship when there is no written contract or other employment agreement that addresses the grounds for termination.
The public policy exception states that employers cannot fire employees for reasons that are protected by law or are contrary to public policy. For example, an employer cannot fire employees for refusing to engage in illegal activities, taking time to vote, attending jury duty, or becoming a whistleblower.
Maryland law has several specific exceptions. Employers cannot fire employees for demanding wages or overtime wages they have earned. They cannot fire workers for filing workers' compensation claims. Additionally, employers cannot fire employees because of their race, religion, age, gender, disability, national origin, or marital status.
If you are unsure whether firing an employee violates federal or Maryland law, talk with an attorney about wrongful termination laws and your obligations under Maryland at-will employment laws. Proactive legal services can help avoid a wrongful termination claim.
Essential Maryland Business and Labor Laws
Every Maryland business owner should know about employment laws. Understanding Maryland labor laws and federal law is crucial for compliance. If you are running a small business, or an employer or a manager, one of your top priorities is to know the basic rules and regulations pertaining to hiring new employees.
The main thing to know is that every state has different labor laws that apply to employers. Maryland employers with even one employee must be aware of these laws. It’s important for any company in Maryland with in-state employees or employees in other states to understand Maryland labor laws and follow them accordingly.
You want your hard work to pay off by avoiding costly penalties while still providing your staff with a fair wage and safe working conditions, so it pays for you to do the research on these issues before diving into the workforce!
1. The Maryland Minimum Wage Act: Understanding Maryland Minimum Wage
he Maryland Minimum Wage Act is intended to protect workers from exploitation by ensuring they are paid a fair wage. As of January 1, 2024, all employers pay a minimum wage of $15 per hour, regardless of the number of workers they employ. While the Maryland Minimum Wage Act sets state-specific requirements, employers must also comply with federal laws, including the Fair Labor Standards Act (FLSA).
In addition to a statewide minimum wage law, counties in Maryland may enact minimum wage laws for employees within their counties. The county cannot enact a law that decreases the minimum wage below the state minimum wage. Montgomery County and Howard County have minimum wages higher than the state minimum wage.
2. The Maryland Equal Pay for Equal Work Act
The Equal Pay for Equal Work Act addresses the inequalities in pay among employees. It applies to all employers regardless of their size. The Act prohibits employers from discriminating against employees based on their gender. Employers are prohibited from:
Paying wages to an employee that are less than the wages paid to other employees under similar circumstances based on the employee's sex or gender identity; and,
Providing less favorable employment opportunities based on an employee's sex or gender identity.
Providing less favorable employment opportunities includes directing or assigning an employee a less favorable career track or failing to provide information about advancement or promotions. It also includes depriving or restricting an employee of opportunities that would be available to them but for their sex or gender identity.
The law does not prevent employers from paying different wages to different employees. However, the difference must be based on a lawful premise, such as a merit or seniority system that does not discriminate based on sex. Other lawful exceptions may apply. Another exception would be paying different wages for jobs that require different skills or abilities. Employers must review the Act carefully to ensure their pay schedules adhere to the law.
3. The Federal Family and Medical Leave Act (FMLA)
The FMLA is a federal law that the government created to protect workers from losing their jobs because of temporary situations such as medical issues or family reasons. the Family Medical Leave Act guarantees eligible employees up to 12 weeks of unpaid leave in a 12-month period. During this time, you can take care of your family or recover from a serious medical condition. The terms of leave can also be specified in an employment contract, providing additional clarity for both parties.
Reasons an employee can take covered FMLA time include, but are not limited to:
The birth of a child and to care for the child during their first year of life.
To care for an adopted or foster child within the first year of placement.
To care for an employee's spouse, child, or parent who has a serious health condition.
A serious health condition that prevents the employee from performing the duties of their job.
The Act also provides up to 26 covered workweeks during a 12-month period to care for a covered servicemember with a serious illness or injury. The employee must be the servicemember's spouse, parent, son, or daughter.
4. The Federal Lilly Ledbetter Fair Pay Act of 2009
The Lilly Ledbetter Fair Pay Act (2009) overturned the U.S. Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc. (2007). The decision severely restricted the time an employee had to file a complaint for employment discrimination concerning their compensation. The Act amends the Civil Rights Act of 1964 to state that an unlawful employment practice occurs when:
An employer makes a discriminatory compensation decision or adopts a discriminatory compensation practice;
An employee becomes subject to a discriminatory compensation practice or decision; or,
An employee is impacted by the application of a discriminatory compensation practice or decision, including each time compensation, wages, or benefits are paid.
The Act applies the provisions to claims under the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973. The Act also amends the Age Discrimination in Employment Act of 1967 to apply these same provisions.
5. Title VII of the Civil Rights Act of 1964
Title VII of the Civil Rights Act of 1964 protects employees and job applicants from employment discrimination based on their color, national origin, race, sex, and religion. It protects workers against terms and conditions of employment that appear neutral but have the effect of discriminating against employees based on these protected classes. The Act makes it unlawful for an employer to retaliate or take negative action against an employee because they complained about discrimination, filed a complaint with the government, or participated as a witness in an employment discrimination case.
6. Maryland Workers' Compensation Law: Coverage, Claims, and Benefits
As a business owner, you know how valuable your employees are to your success. To ensure their safety and protect yourself from liability, make sure you are familiar with the Workers’ Compensation requirements for employers in Maryland. Workers’ Compensation pays employees for their medical expenses, a portion of their lost wages, and other benefits if they are injured on the job.
Workers' compensation is a no-fault insurance system. Therefore, a worker may be eligible to receive workers' compensation benefits even though the worker is at fault for their workplace injury. However, there are restrictions. Workers may not be covered by workers' compensation if they intentionally caused their injuries or were intoxicated when the injury occurred.
Employers benefit from workers' compensation because employees covered by workers' comp are prohibited from suing their employers for pain and suffering and other damages. An exception exists for intentional injuries caused by the employer. Also, employees may sue third parties for damages if a third party negligently or intentionally caused a workplace accident.
7. Employee Rights to Organize and Bargain Collectively
Maryland being an “at-will” work state is important for understanding collective bargaining. “At will” is not the same as “right to work.” The terms do not mean the same thing, even though many people confuse and use them interchangeably.
The “employment at will” doctrine refers to firing an employee. However, “right to work” laws involve an employee's rights while working for an employer. Therefore, the “right to work” becomes an essential factor when discussing an employee's right to collective bargaining in Maryland.
The “right to work” doctrine established in the National Labor Relations Act of 1935 (NLRA) allows an employee the option of not participating in collective bargaining or union representation. However, it also protects the rights of employees to voluntarily participate in collective bargaining. Therefore, in a right-to-work state, an employee is neither required nor prohibited from participating in collective bargaining or a union.
Maryland does not have specific “right to work laws.” Therefore, it is generally not considered a “right-to-work” state. However, the State has enacted laws specifically prohibiting employers and employees from making “promises” related to the “right to work” protections in the NLRA as a condition of employment. Under Maryland Labor and Employment Code §4-304, employers cannot:
Force employees to join or remain a member of a labor organization
Prohibit any employee from joining or remaining a member of a labor organization
Terminate the employment relationship if the employee joins or remains a member of a labor organization
Courts are not permitted to grant relief to a party who made a promise that violates the code section. This law is based on the rights in Code §4-302 specifically providing the policy of the State of Maryland that employees are free to associate, organize, and designate a representative to negotiate the terms and conditions of employment.
Employers cannot force employees to join a union or pay union dues as part of their employment. Likewise, employers cannot prohibit employees from participating in collective bargaining or joining a union. These protections apply to verbal, written, implied, or express statements by an employer, whether the statements are made to existing employees or new hires.
Get Help From an Experienced Maryland Business Law Attorney
The above laws are only an example of the labor laws employers must follow to avoid problems. If you have questions about federal or Maryland labor laws, talk with our Maryland business law attorney. A business law attorney helps ensure your employment contracts, agreements, and other documents comply with state and federal laws regarding all matters related to employment.
Contact Thienel Law to schedule a consultation to discuss all matters related to business law and taxes.
