Thursday, August 16, 2018

Can Severance Pay Be a "Wage" under the Maryland Wage Payment and Collection Law? Maybe!

Severance pay falls into two legal baskets under Maryland law.
  1. Severance pay earned for an employee's labor or work. 
  2. Severance pay awarded in exchange for something other than work, most commonly in exchange for a covenant not to compete or in exchange for a waiver of claims.
Back in 2003, in Stevenson v. BB&T the Court  of Appeals ruled that severance for labor is a "wage" subject to the Maryland Wage Payment and Collection Law.   Severance for a non-compete or waiver is not a wage subject to the Wage Payment and Collection Law. 

Does this matter?  It sure does.  Wages subject to the Maryland Wage Payment and Collection Law can be tripled (if withheld in bad faith).

In Blood v. Columbus U.S. (April 2018) the Maryland Court of Special Appeals recently followed Stevenson:  money paid in exchange for a period of non-competition is not a wage “due for work" and therefore not subject to the Maryland Wage Payment and Collection Law.

Monday, October 02, 2017

Maryland Misclassification Cases Often Start with a Claim for Unemployment

Where can Maryland employees misclassified as independent contractors go to file a claim?  The unemployment office is one place they can go (after they are terminated from the job).

Maryland's unemployment law has a restrictive test for employment status.  You are a presumed to be an employee unless:


  • You are free from direction and control;
  • You are engaged in an independent business that is of the same nature as the work your are performing; and
  • You are performing the work is outside the usual course of business of the person for whom it is performed OR the work is performed outside any place of business of the person for whom it is performed.
A 2016 law, called the "Recovery of Benefits and Penalties for Fraud Act," provides for penalties if an employer knowingly misclassifies an employee.    In addition, the Act requires that if Maryland's Unemployment Office finds that an employer has misclassified an employee it must notify the tax collector (the Comptroller) and the Workers Compensation Commission.  

Thursday, September 28, 2017

Maryland Paid Sick Leave Law Vetoed by Govenor Hogan - Update - Veto Overridden!

 Update - The General Assembly voted to overrider the veto.   See this helpful link on Maryland's sick leave law.

+++++++++++++++++++++++++++++++++++
On May 25, 2017, Governor Hogan vetoed the "Maryland Healthy Working Families Act."  This Act would have mandated that private-sector employers who employ more than 15 employees provide paid sick leave.    Employees would have earned 1 hour of paid sick leave for every 30 hours that they worked.  But, as noted, Governor Hogan vetoed the Act.

  Had the bill not been vetoed, it would have preempted the one Maryland jurisdiction that has a paid sick leave law.  That is Montgomery County, which has passed the Earned Sick and Safe Leave Law.

  Governor Hogan claims to support a version of paid sick leave, but would limit it to employers with more than 50 employees and would offset the costs through tax incentives.    Governor Hogan established a "Committee on Paid Leave" to study how best to implement paid leave.   

 Maryland's leave laws are summarized in this chart.

Friday, November 06, 2015

Maryland False Claims Act of 2015: State Law Protection for Whistleblowers

The Maryland False Claims Act took effect June 1, 2015.  The main provisions of the Act: 
  1. Prohibit a person from knowingly making a false or fraudulent claim for payment or approval by the government; 
  2. Permit a private citizen to file a civil action on behalf of the government against a person who has made a false claim; 
  3. Require the court to award a certain percentage of the proceeds of the action to the private citizen initiating the action; and 
  4. Prohibit retaliatory actions by a person against an employee, contractor, or grantee for disclosing a false claim or engaging in other false claims-related activities.

For employees and contractors, the Act provides two avenues to pursue relief.  

"Qui-Tam Claims."  An employee who discovers a false claim can pursue a civil action on behalf of a governmental entity.   Such a civil action must be filed under seal and remain under seal for 60 to allow the governmental to review it.  The case only goes forward if the government chooses to pursue the claim.  If the governmental wins, the court must award the private party not less than 15% and not more than 25% of the proceeds, and in certain circumstances not more than 10% of the proceeds, proportional to the amount of time and effort that the party contributed to the final resolution of the action. 

"Retaliation Claims."  Employees and contractors who investigate, initiate, testify in, or assist a lawful action against a fraud are protected if they disclose a fraud to a supervisor or the government. They are also protected when they refuse to engage in a fraud against the state.    Victims of retaliation may sue to seek an injunction to stop the retaliation. They also may get double their back pay and punitive damages. The law provides a statute of limitations of at least three years.

Employee/whistle-blowers considering pursuing either avenue to relief should consult counsel since this can a difficult area to navigate.

Wednesday, October 28, 2015

Minimum Wage Increases in Montgomery and Prince George's Counties effective October 1, 2015.

Effective October 1, 2015, the minimum wage in Montgomery and Prince George's Counties went up to $9.55 per hour. For the other counties in Maryland, the minimum wage is $8.25. Here is the Maryland Department of Labor's minimum wage site. Here is the Maryland Department of Labor's minimum wage site.

Wednesday, October 14, 2015

Chart Summarizing Maryland's Leave Laws

I have been doing some thinking about Maryland's Leave Laws. I put together a very simplistic summary to keep the laws straight in my mind. I pasted it below and hope that it helps!

Thursday, October 08, 2015

The Maryland Parental Leave Act

 The Maryland Parental Leave Act requires requires employers with 15 to 49 employees to provide employees with unpaid parental leave.

An eligible employee may take up to a total of six weeks of parental leave in a 12-month period for the birth, adoption, or foster placement of a child.

During parental leave, the employer must maintain existing coverage for a group health plan

To be eligible for parental leave, an employee must have worked for the employer for at least one year and for 1,250 hours in the previous 12 months.  An eligible employee is generally required to provide the employer with 30-day prior notice of parental leave.

If the employer provides paid leave to employees, the employer may require that the employee substitute the paid leave for any part of or all of the period of parental leave.

The Act provides a private cause of action for damages caused by an employer’s noncompliance. If a court determines that an employee is entitled to judgment in an action, the court must award reasonable attorney’s fees and other costs of the action to the employee.

Montgomery County Employers Will Be Required to Provide Paid Sick Leave Beginning October 1, 2016

    Montgomery County is one of the few jurisdictions that require all employers provide paid sick leave.  That is the law under the Earned Sick and Safe Leave Act passed by the Montgomery County Council.

    All employees will be entitled to accrue one hour of paid sick leave for every thirty hours worked. Employers with five or more employees must provide up to 56 hours per year of paid sick leave to employees. Employers with less than five employees are required to provide up to 32 hours of paid sick leave and twenty-four hours of unpaid sick and safe leave per year.

 The permissible uses of sick leave are broad.  They include:

  • Treating the employee’s own illness; 
  • Attending preventative medical appointments; and
  • Caring for a covered individual with an illness.
The Act contains and anti-retaliation provision and a complaint procedure.   As noted, the Act becomes effective October 1, 2016.