Maryland has amended its Wage Payment and Collection Law so that the definition of “wages” now includes overtime wages. This effect of the amendment, which goes into effect on October 1, 2010, is that the penalty for failure to pay overtime will increase significantly in Maryland. Specifically, if a Maryland employer improperly fails to pay overtime to employees entitled to overtime (known as “non-exempt employees”), the employer may be liable for three times the amount of the overtime owed (as opposed to two times under federal law) plus the employee’s attorneys’ fees (which often can be much higher than the amount of overtime owed). Further, under Maryland law an employee can claim up to three years of back overtime liability (federal law provides for up to 2 years for a non-willful violation and 3 years for a willful violation). Thus, a Maryland employer that was previously subject to paying up to two (or possibly three) years of back overtime doubled may now be subject to paying up to three years of back overtime tripled.
Maryland also established a new administrative procedure, also effective October 1, 2010, for employees who have wage claims of up to $3,000. Those employees may now file such claims with the Maryland Division of Labor and Industry (“Division”). The Division has the authority to investigate the claim and, if it finds the wages are owed, issue an order requiring the employer to pay the wages. Employers are required to respond to the Division within 15 days after receiving notice of a claim.
Now more than ever, employers should review their employee classifications and payroll procedures to make sure (i) employees who are not being paid overtime satisfy the requirements of law to be ineligible for overtime and (ii) overtime is being paid properly to those employees eligible for overtime.
Maryland has enacted The Healthy Retail Employee Act. This law, which goes into effect on March 1, 2011, requires Maryland retailers with 50 or more employees to provide breaks to employees employed at retail locations as follows: (i) a 15-minute break for a shift of 4 to 6 consecutive hours; (ii) at least a 30-minute break for a shift of more than 6 hours (an employee does not have to be provided the 15-minute break if entitled to the 30-minute break), and (iii) if the employee’s shift is 8 consecutive hours, an additional 15-minute break for each additional 4 hours of work.
Employers are permitted to enter into written agreements with employees whose work hours do not exceed 6 consecutive hours to waive the break requirements. The Act also allows for a “working shift break” if the employee’s work prevents the employee from being relieved during the shift break, or the employee is allowed to consume a meal while working and the time is counted towards hours worked and paid. In either case, however, the working shift break must be mutually agreed to by the employer and the employee in writing.
Exempt from these break requirements are employees: (i) covered by a collective bargaining agreement or employment policy that includes breaks equal to or greater than those required by the new law, (ii) exempt from overtime under the federal Fair Labor Standards Act, (iii) who work in a corporate office or other office location, and (iv) who work at least 4 consecutive hours at a single location with 5 or fewer employees. Restaurants are also exempt.
The law includes penalties for violations, including civil penalties of up to $300 ($600 for repeat violations) for each employee for whom there is a violation.
Maryland retail employers should review their break policies and, by March 1, 2011, modify them as necessary to be compliant with this new law.
DOL Clarifies Definition of “Son or Daughter” Under Family and Medical Leave Act
The U.S. Department of Labor (“DOL”) has issued additional guidance pertaining to employees who do not have a biological or legal relationship with a child who may be eligible for leave under the Family and Medical Leave Act (“FMLA”). According to DOL, while each situation will depend on its particular facts, an employee may stand in loco parentis to a child (having assumed the obligations incidental to being a parent) when the employee provides either day-to-day care or financial support of the child. The guidance provides various examples of when such a relationship might be established by persons who are not related to the child biologically or legally, such as an employee who will share equally in the raising of a child adopted by a same sex partner. The guidance also provides that “a simple statement asserting that the requisite family relationship exists is all that is needed.”
Employers should carefully assess each situation when parental-type leave is requested under the FMLA in determining whether the employee is eligible for leave.
As a result of the COBRA subsidy not being extended for employees involuntarily terminated after May 31, 2010, employers should be careful with respect to such employees and their dependents to use health insurance continuation notification forms that do not include the subsidy information. DOL has appropriately modified its model forms. The COBRA Model General Notice (required to be provided when an employee becomes covered under a health insurance plan subject to COBRA) and The COBRA Model Election Notice (for use when an employee loses coverage) can each be found at http://www.dol.gov/ebsa/COBRA.html.
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