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Equal Pay

Effective October 1, 2016, Maryland’s Equal Pay for Equal Work law prohibits employers from discriminating by paying employees of one sex at a rate higher than the rate paid to employees of the opposite sex who work in the same establishment and who performs comparable work. Similarly, employers may not assign less favorable employment opportunities to employees based upon gender. This would include prohibiting employers from “steering” certain favorable career opportunities away from employees based on sex or gender identity.

Pay Transparency

In addition, the law prevents employers from prohibiting an employee from “inquiring about, discussing, or disclosing the wages of the employee or another employee,” or “requesting that the employer provide a reason for why the employee’s wages are a condition of employment.”  Also, an employer may not take any adverse employment action against an employee for: “inquiring about another employee’s wages; disclosing the employee’s own wages; discussing another employee’s wages if those wages have been disclosed voluntarily; asking the employer to provide a reason for the employee’s wages; or aiding or encouraging another employee’s exercise of rights under [the Act].”

The law does not, however, permit an employee with access to other employees’ wages by virtue of that employee’s essential job functions to disclose the wages of other employees without restriction. Employers are permitted to discipline employees for disclosing the wage information of other employees if the employee whose wages are disclosed did not voluntarily disclose his or her wages to that employee or if the disclosed wage information of other employees is known solely because of the employee’s essential job function.

Furthermore, the law does not preclude employers from limiting discussion of wages in some basic ways. For example, employers may establish reasonable workday limitations on the time, place, and manner for inquiries, discussions, or disclosures about employee wages, provided such limitations are set forth in a written policy provided to their employees.  The written policy also must not “diminish employees’ rights to negotiate the terms and conditions of employment under Federal, State, or local law.”  This includes any protections that the National Labor Relations Act may provide with respect to speech in the workplace.  The policy may also prohibit employees from discussing the wages of another employee without the permission of that employee.

Employer Considerations

Employers should note that the law acknowledges that discrepancies in pay may exist regardless of gender based upon the other criteria such as seniority systems, merit systems, jobs that require different abilities and skills or the performance of different duties or services, as well as work performed on different shifts at different times of day. Employers may also take into account a bona fide factor other than sex or gender identity, such as education, training, or experience, to account for certain discrepancies in pay.

In order to remain in compliance with the law, employers will be required to ensure that company documentation is maintained concerning: wages of employees, job classifications of employees, and other conditions of employment and wages. It is crucial that employers take proactive steps to identify and mitigate risks associated with compensation discrimination. Employers should consider conducting a “pay audit” to identify potential disparities in pay and identify any necessary steps to remedy those disparities. Finally, employers should review the manner in which they determine compensation for employees, their hiring practices, and their pay increase processes to ensure that those policies do not adversely impact employees based upon sex or gender identity.

The employment law landscape here in Maryland is ever-changing. Business and employment practices need to be regularly reviewed and updated to keep up with these changes. Your legal team here at A&C is well-versed in business and employment law, so let us review your employee handbook and other employment practices to ensure your business practices are in compliance with all applicable State and local laws. Please call  Todd Pounds or David Hruda at 301-292-3300, or via email at tpounds@alexander-cleaver.com, and dhruda@alexander-cleaver.com respectively, to discuss these and other ways your A&C team can help protect your business!

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