On October 1, 2024, Maryland’s Pay Stub/Pay Statement and Pay Transparency laws went into effect. The laws were passed during the General Assembly’s 2024 legislative session and amended the state’s Wage Payment and Collection Law and Equal Pay for Equal Work law, respectively.

Pay Stub/Pay Statement Law Requirements

Under the Pay Stub/Pay Statement law, which covers most private sector employers, but not public sector employers, employers must provide specific written disclosures to employees regarding their earned wages. To comply with the law, each payday an employer must provide a “written statement” of the following:

• The employer’s name registered with the state, address, and telephone number;
• The date of payment and the beginning and ending dates of the pay period for which the payment is made;
• The number of hours worked during the pay period (unless the employee is exempt from overtime under federal and state law);
• The rates of pay;
• The gross and net pay earned during the pay period;
• The amount and name of all deductions;
• A list of additional bases of pay, including bonuses, commissions on sales, or other bases; and
• For each employee paid at a piece rate, the applicable piece rates of pay and the number of pieces completed at each piece rate.

Employers must satisfy the “written statement” requirement either by providing the information on a physical pay stub or an online pay statement.

To help employers comply with the law’s requirements, the Division of Labor and Industry (DLI) has created a pay stub template, which can be found here: pay stub template.

Pay Stub/Pay Statement Enforcement

The law does not provide a private cause of action and is enforceable only by the DLI. In the event the DLI issues a finding of deficiency, the DLI may issue an order directing the employer to provide the required information to the affected employees. The DLI also has discretionary authority to impose an administrative penalty of up to $500 per affected employee. The penalty amount is determined based on: (1) the gravity of the violation; (2) the size of the employer’s business; (3) the employer’s good faith; and (4) the employer’s history of violations of the law.  

Pay Transparency Law Requirements

Under the Pay Transparency law, employers must disclose the wage/salary range, a “general description” of benefits, and “any other compensation” offered for a posted position. The law applies to both external and internal postings and repostings—whether posted directly or through a third party—for “any position for work that will be physically performed, at least in part” in Maryland. Thus, out-of-state employers that advertise to remote employees based in Maryland must comply with the law’s requirements. Further, if no posting was made available to an applicant, the required information must be disclosed “before a discussion of compensation is held with the applicant” and “at any other time on request of the applicant.”

To comply with the disclosure requirements, employers must set the wage range disclosed in “good faith.” The “good faith” requirement can be satisfied if the employer sets the range using a reasonable method such as: (1) using a salary scale, (2) using a range previously determined for the position, or budgeted for the position, or (3) using the actual pay received by people doing the same or similar positions. This list is not exclusive or exhaustive; the ultimate lodestar is that there is a demonstrable basis for the set range.

Regarding the disclosure of benefits, the law requires only a “general description” of benefits offered. The law does not clearly define the exact contours of what constitutes a “general description,” but the DLI has provided an example that a “general description” would not include a list of all details of, for example, the employer’s medical plan, but would require disclosure of the fact that the employer offers individual and family health plans. The law does not require disclosure of state-mandated benefits such as sick and safe leave and jury duty leave. The law also does not clearly define what is considered “any other compensation,” but the DLI has issued guidance that “[t]his requirement is intended to broadly cover ‘any’ other earnings or monetary compensation that any employee may receive as payment in return for work performed.”

The DLI has also created a template to help employers comply with the law’s requirements: compensation disclosure form.

Pay Transparency Law Enforcement & Other Requirements

Only the DLI has the authority to enforce the law. Similar to its enforcement authority under the Pay Stub/Pay Statement law, the DLI may issue an order compelling compliance and may, for subsequent violations, assess a penalty for each affected employee or applicant. The amount is also determined based on: (1) the gravity of the violation, (2) the size of the employer’s business, (3) the employer’s good faith, and (4) the employer’s history of violations of the law.

What Employers Should Do Now

To comply with the law’s requirements, employers should review their payroll systems to ensure that they are set up to generate the information that must be disclosed. Employers should also review their job postings to ensure that they disclose a wage range that is grounded in “good faith” and satisfies all other disclosure requirements. Finally, with respect to the Pay Transparency law specifically, employers should review their record policies to ensure that they satisfy the law’s recordkeeping requirements: The posting must be maintained for three years after the position is filled or, if the position is not filled, three after the position is initially posted. In addition, based on the DLI’s representations, it is recommended that employers also maintain records supporting the “good faith” basis.