Compliance Watch:
Penalties for Breaking Maryland Labor Laws

April 3rd 2024

Maryland has established a comprehensive framework of labor laws designed to safeguard the rights and interests of workers. These laws encompass a wide range of areas, including wage and hour regulations, employee classification, workplace safety standards, discrimination and harassment protections, and family and medical leave provisions. And in today’s continuously evolving job market, it’s crucial for Maryland businesses to be well-versed in the legal landscape governing labor practices.

This article aims to shed light on the state’s key labor laws and the penalties that come with breaking them. It will also provide proactive steps employers can take to keep a harmonious workplace and ensure they’re always on the right side of the law.

This Article Covers

Most Common Labor Law Violations in Maryland
Penalties for Breaking Maryland Labor Laws
Best Practices to Avoid Violating Maryland Labor Laws

Most Common Labor Law Violations in Maryland

Despite the comprehensive set of labor laws that Maryland has in place, numerous instances of labor law violations still persist. Here’s a look at some of the most common violations that employers make so you can learn from them:

  • Paying below the minimum wage: Some employers may try to cut corners by paying workers less than the legally mandated minimum wage. This remains a big issue in the US, especially in Maryland, with 8,290 wage theft claims dating back to 2009 totaling a whopping $20,140,568.60.
  • Not paying overtime: According to the Fair Labor Standards Act (FLSA) and Maryland state law, non-exempt employees are entitled to overtime pay for every hour worked beyond 40 in a workweek. Employers may violate this law by misclassifying employees as exempt, failing to pay overtime rates for extra hours worked, or adopting practices such as off-the-clock work without proper compensation.
  • Assigning minors to hazardous jobs: A common mistake employers make is assigning minors to hazardous jobs, leading them to deal with heavy penalties. Just recently, 62 McDonald’s locations were collectively fined more than $200,000 for violating federal child labor laws and letting minors work on ovens and deep fryers. Five of these locations were in Maryland.
  • Requiring tipped workers to surrender all tips: In some instances, employers have been reported to require tipped workers to surrender all of their tips. This is a clear violation of labor laws that protect the rights of these employees. Employers can never take employee tips and keep them for themselves.
  • Withholding wages from unused paid vacation time upon termination: When employment terminates, employers sometimes unlawfully withhold wages from unused paid vacation time. However, under Maryland labor laws, employees are entitled to receive compensation for any accrued and unused vacation time upon separation from the company.

Penalties for Breaking Maryland Labor Laws

It’s crucial to play by the rules, especially regarding labor laws. Ignoring these laws can lead to hefty penalties and legal troubles no one wants to deal with. In this section, we’ll dive into the key labor laws you need to know about in Maryland along with the consequences you might face if you break them.

Title VII of the Civil Rights Act of 1964

Title VII, part of the Civil Rights Act of 1964, forbids discrimination in almost all employment situations based on race, color, religion, gender, pregnancy, or national origin. This generally applies to employers with 15 or more employees. Title VII ensures fair treatment by requiring employers to base employment decisions solely on objective, job-related factors.

Employers are prohibited from discriminatory practices during various stages, including recruitment, hiring, contract negotiations, termination, and apprenticeship programs. It’s also forbidden to ask discriminatory questions during job applications, seeking information that could affect employment decisions, and including discriminatory details/conditions in job advertisements.

Several amendments have been made to Title VII of the Civil Rights Act of 1964 throughout the years. A notable one is the Lilly Ledbetter Fair Pay Act of 2009. This federal law strengthens protections against pay discrimination. It allows individuals who experience pay discrimination to seek remedies under federal anti-discrimination laws.

Penalty for Violation

Employees have the right to a jury trial in cases of intentional discrimination. They can seek compensatory and punitive damages, subject to the maximum limits outlined in the amended Civil Rights Act of 1991 based on the employer’s number of employees:

  • 15-100 employees: up to $50,000 maximum
  • 101-200 employees: up to $100,000 maximum
  • 201-500 employees: up to $200,000 maximum
  • Over 500 employees: up to $300,000 maximum

Remedies such as back pay, reinstatement, and retroactive seniority are also available for all forms of discrimination, whether intentional or resulting from disparate impact.

Maryland Minimum Wage Law

With the passage of the Fair Wage Act of 2023, all Maryland employers, regardless of size, will need to start paying a standardized $15 per hour from January 1, 2024. Some counties though may impose a much higher minimum wage depending on the size of the business.

Tipped employees, on the other hand, have a minimum hourly rate of $3.63. But this is under the condition that these employees earn at least the hourly minimum wage of $15 when tips are included.

Penalty for Violation

Under Maryland wage payment law, if a court determines that wages were unlawfully withheld and not due to a genuine dispute, the court can order the employer to pay damages of up to three times the unpaid wage amount, along with attorney fees. It is the employer’s responsibility to prove the existence of a genuine dispute, not the employee’s.

FLSA Overtime Laws

In Maryland, overtime regulations are based on the Fair Labor Standards Act (FLSA). And according to the FLSA, any hours worked beyond 40 hours a week are considered overtime. Employers are required to pay 1.5 times the regular rate for overtime hours. This would put the overtime wage in Maryland at $22.50 per hour. It’s important to note that only hours exceeding 40 a week are eligible for overtime pay, not hours worked over eight a day.

There are, however, certain exceptions to the overtime rate set by FLSA, this includes:

  • Salaried employees who earn more than $684 every week
  • Workers at institutions providing on-site care for the elderly, sick, and disabled if they work over 48 hours per week
  • Employees at bowling establishments working over 48 hours per week
  • Workers over the age of 62 who work 25 hours or less per week
  • Taxi drivers
  • Outside salespersons, and so on.

Learn more details about Maryland Overtime Laws.

Penalty for Violation

Employers who knowingly or repeatedly violate FLSA’s overtime pay requirements may be fined up to $1,000 for each violation and each employee.

Family and Medical Leave Act (FMLA)

The FMLA is a federal law that allows eligible employees to take up to 12 weeks of unpaid leave for certain family and medical reasons. This includes situations like the birth or adoption of a child and caring for a family member with a serious health condition. The law also ensures that employees’ health benefits are maintained during their leave and guarantees their right to return to their previous or equivalent positions when they return to work.

Penalty for Violation

The Wage and Hour Division enforces the FMLA for employees in private, state, and local government sectors and some federal employees. In cases where violations cannot be satisfactorily resolved, the US Department of Labor can take decisive action by bringing legal proceedings to ensure compliance. And if the court rules in favor of the complainant, employers are obliged to grant them their FMLA leave and provide appropriate monetary damages, covering attorney fees and court costs.

Maryland Equal Pay for Equal Work Law

Another Maryland law that aims to eliminate discrimination in the workplace is the Maryland Equal Pay for Equal Work Law. This law focuses on preventing employment discrimination based on sex or gender identity. This includes paying lower wages to employees of one sex or gender identity compared to others in certain situations. It also prohibits providing less favorable employment opportunities based on sex or gender identity.

Less favorable employment opportunities refer to actions such as assigning employees to less favorable career tracks or positions or limiting their employment opportunities because of their sex or gender identity.

Penalty for Violation

In October 2019, the Maryland Department of Labor introduced new civil penalties under the Equal Pay and Equal Work Act. The update clarifies prohibited acts by employers and the corresponding penalties for violations. This may involve fines of up to $300. Employers with multiple violations within three years may face an additional penalty of 10% of the damages owed.

Occupational Safety and Health Administration (OSHA) Act

Maryland follows the federal Occupational Safety and Health Act (OSHA) through its subsidiary, Maryland Occupational Safety and Health (MOSH). MOSH complies with federal OSHA standards applicable to both public and private sector employers. These standards cover a wide range of operations. Additionally, MOSH has implemented the following specific standards:

General Industry:

  • No smoking is allowed indoors at workplaces.
  • Safety measures for confined spaces.
  • Guidelines for personnel platforms suspended from cranes, derricks, and hoists.
  • Regulations for tree care and removal.
  • Protection against occupational exposure to formaldehyde.

Construction:

  • Fall protection requirements for steel erection.
  • Safety protocols for crane operations.
  • Regulations regarding lead in construction.
  • Requirements for protective systems in excavations.

Agriculture:

  •  Sanitation standards for fieldwork.

By incorporating and enforcing these standards through on-site inspections and consultations, MOSH ensures the safety and well-being of workers across various sectors.

Penalty for Violation

The Occupational Safety and Health Administration (OSHA) Act establishes mandatory civil penalties for employers, with fines of up to $7,000 per serious violation and optional fines of up to $7,000 per nonserious violation. If violations are not corrected within the designated time frame, penalties of up to $7,000 per day may be proposed. Additionally, employers who willfully or repeatedly violate the Act may face civil penalties of up to $70,000 per violation.

Aside from these hefty fines, OSHA also includes provisions for criminal penalties. In cases where a willful violation leads to the death of an employee, upon conviction, the offender may be fined up to $10,000, imprisoned for a maximum of six months, or both. For employers with multiple convictions, the maximum penalties are doubled.

Whistleblower Protection Laws

Whistleblower protection laws in Maryland vary for public and private sectors. Public sector employers are not allowed to fire, threaten, or discriminate against employees who report law violations, public health, and safety risks, mismanagement of state funds, gross mismanagement, wasteful spending, or abuse of authority.

It’s important to note that these rules vary depending on factors such as the employee’s industry, the seriousness of the misconduct, and the type of misconduct reported. For example, nurses reporting health and safety issues will have different rules than project managers reporting safety concerns.

Penalty for Violation

A complaint must be submitted within six (6) months from when the complainant becomes aware of or reasonably should have become aware of the violation. Once a complaint is received, it will be investigated within 60 days to determine if a violation occurred.

If the investigators find that there was indeed a violation, the whistleblower can take part in a hearing and have the opportunity to receive compensation for lost benefits, attorney’s fees, and other relevant damages as deemed necessary by the court.

Recordkeeping Laws

According to the Maryland Department of Labor, employers must keep employee records for three years after their employment ends. These records should include the following information:

  • Employee’s name
  • Address
  • Race
  • Gender
  • Occupation
  • Pay rate
  • Pay the amount for each period
  • Daily work hours
  • Weekly work hours

The Fair Labor Standards Act (FLSA) also has its own recordkeeping requirements for the Equal Pay Act (EPA). It requires employers to retain records for at least two years that provide explanations, such as wage rates, job evaluations, seniority and merit systems, and collective bargaining agreements, for paying different wages to male and female employees in the same establishment.

These requirements apply to all employers covered by federal anti-discrimination laws, regardless of whether a charge has been filed against them.

Penalty for Violation

Failure to maintain the records mandated by the FLSA can result in penalties. Although the Department of Labor does not have the authority to levy civil monetary penalties for recordkeeping violations, deliberate law violators may face criminal consequences. Criminal sanctions can include substantial fines of up to $10,000, imprisonment for a maximum of six months, or a combination of both.

Maryland Child Labor Laws

State and federal laws, like the FLSA, are in place to ensure the safety and well-being of young workers in Maryland.

According to the Maryland Department of Labor, individuals under 18 must obtain work permits to start working. Whenever a minor changes jobs, they will need a new work permit. And employers must keep these permits on file for three years.

For minors aged 14 and 15, additional restrictions apply. One of these restrictions is that they are only limited to a maximum of 3 hours per day and 18 hours per week when school is in session. But when school is not in session, they can work for longer hours as long as it doesn’t exceed 8 hours per day or 40 hours per week.

There are also specific jobs that are deemed too hazardous for minors:

  • Working for family members in mining or manufacturing
  • Caddying on golf courses
  • Making wreaths
  • Newspaper delivery
  • Instructing on sailboats
  • Performing as entertainers
  • Working as counselors in certified youth camps
Penalty for Violation

Those who willfully violate child labor restrictions under the Fair Labor Standards Act may face fines up to $10,000 or imprisonment for a maximum of 6 months, or both. Imprisonment is only applicable if the individual has been previously convicted for violating the Fair Labor Standards Act. Heavier penalties can be issued to employers if the violation leads to serious injury.

Best Practices to Avoid Violating Maryland Labor Laws

Navigating through the complex landscape of Maryland labor laws can be challenging for employers. To help make it easier, here’s a look at some of the best practices that can help you stay on the right side of Michigan labor laws:

Get to know Maryland labor laws.

Take the time to familiarize yourself with the specific labor laws and regulations in Maryland that apply to your industry and business. Understanding the rules on minimum wage, overtime pay, employee classification, breaks, and other employment-related areas is the first step to compliance.

Set clear employment policies.

Once you have a good grasp of the key labor laws applicable to your business, it’s time to establish clear and comprehensive employment policies. These policies should align with Maryland labor laws and cover essential areas such as wages, work hours, leave entitlements, anti-discrimination measures, and harassment prevention. Make sure all employees are aware of these policies and have access to written copies.

Provide proper employee training.

Proper training is a great way to help with workplace compliance and empower your managers and employees. Conduct regular training sessions to educate them about Maryland labor laws, their rights, and their responsibilities. Managers should receive training on fair employment practices, wage and hour regulations, and maintaining a workplace free from discrimination. Employees, on the other hand, should be educated about their rights, including minimum wage, overtime eligibility, and safety guidelines.

Maintain accurate records.

Keeping accurate records is not only good practice but also a legal requirement. Implement a reliable recordkeeping system to document important employee information, such as work hours, wages, leaves, and deductions. You can also utilize time tracking software. This can effectively eliminate manual errors, ensure consistent data entry, and allow for real-time monitoring and reporting of hours worked.

Provide a safe working environment.

Ensuring a safe and healthy workplace is crucial for the well-being of your employees and compliance with Maryland’s occupational safety and health laws. Regularly inspect your premises, identify potential hazards, and take necessary steps to address them. Provide adequate safety equipment and training to your employees, and promote a culture of safety awareness. Remember to keep records of safety training and any workplace incidents or injuries that occur.

Stay updated on labor law changes.

Labor laws can change over time. As mentioned earlier, there is a planned change in the minimum wages in Maryland scheduled for implementation in January 2024. Now more than ever, it’s important to stay informed. Stay updated on any revisions or new regulations that impact Maryland labor laws. You can also subscribe to government publications, consult legal resources, and consider joining industry associations or professional networks to stay in the loop. By staying informed, you can make necessary adjustments to your policies and practices to remain compliant.

Learn more about Maryland Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.

Most Read