SB 119
Department of Legislative Services
Maryland General Assembly
2020 Session
FISCAL AND POLICY NOTE
Third Reader
Senate Bill 119 (Chair, Finance Committee)(By Request - Departmental -
Labor)
Finance Economic Matters
Labor and Employment - Wage Payment and Collection - Order to Pay Wages
This departmental bill increases the threshold from $3,000 to $5,000 for a complaint of
unpaid wages to be subject to an order by the Commissioner of Labor and Industry for an
employer to pay wages. The bill takes effect July 1, 2020.
Fiscal Summary
State Effect: The bill’s changes can be handled with existing budgeted resources. The
State is not subject to the Wage Payment and Collection Law as an employer.
Local Effect: None. The bill does not apply to local governments as employers.
Small Business Effect: The Maryland Department of Labor (MDL) has determined that
this bill has minimal or no impact on small business (attached). The Department of
Legislative Services concurs with this assessment.
Analysis
Current Law: Maryland’s Wage Payment and Collection Law regulates the payment of
wages by employers in the State. The law requires employers to pay workers the wage
promised; establish regular paydays; pay wages when due; pay employees in a specified
manner; pay employees at least once every two weeks or twice in each month, with
exceptions; furnish employees with a statement of gross earnings; advise employees of
their rate of pay and designated payday; and pay employees all wages due on termination
of employment. MDL’s Division of Labor and Industry enforces the State’s Wage Payment
and Collection Law. Unless otherwise specified, the definition of “employer” in the State’s
Wage Payment and Collection Law does not include units of government.
The commissioner may investigate a violation of the Wage Payment and Collection Law
only upon receipt of a written complaint by an employee. Whenever it is determined that
the State’s Wage Payment and Collection Law has been violated, the commissioner may
(1) try to resolve the violation informally through mediation; (2) ask the Office of the
Attorney General to bring an action on behalf of the employee; or (3) bring an action on
behalf of the employee in the county where the violation allegedly occurred.
However, for wage complaints amounting to $3,000 or less, the Commissioner of Labor
and Industry uses an expedited process. For these cases, the commissioner must review the
complaint and may investigate the claim and may either issue an order requiring the
employer to pay or dismiss the claim. Within 30 days after receipt of the order to pay
wages, the employer may request an administrative hearing. Under specified
circumstances, the commissioner may proceed in District Court to enforce payment of the
order.
For wage complaints over $3,000, an employee entitled to wages from an employer may –
after two weeks have elapsed – bring an action against the employer in a court of competent
jurisdiction to recover the unpaid wages.
If a court determines that an employer withheld an employee’s wage unlawfully, and not
as a result of a bona fide dispute, the court may award the employee up to three times the
amount of wages owed, counsel fees, and other costs.
Employers who violate the State’s Wage Payment and Collection Law are guilty of a
misdemeanor and may be fined up to $1,000.
Background: Between fiscal 2017 and 2019, the Commissioner of Labor and Industry
received an average of 97 claims annually for unpaid wages between $3,000 and $5,000.
For claims of unpaid wages over $3,000, current law requires an action to be brought in
court. MDL advises that it typically takes one to two years for these court actions to be
resolved and often the employer dissolves the company before a court issues an order. The
wage order process for claims of $3,000 or less is more expedient since, once a
determination is made, most claims are paid or referred to the Central Collection Unit
within 120 days if there are no appeals.
State Fiscal Effect: MDL anticipates receiving the same number of unpaid
wage complaints, but the bill increases the number of complaints subject to the wage order
process instead of having to be settled through the District Court. Thus, the bill enables the
SB 119/ Page 2
Commissioner of Labor and Industry to more quickly resolve claims for unpaid wages.
MDL advises that the increased administrative workload for handling more cases internally
can be accomplished with existing resources.
The Office of Administrative Hearings (OAH) currently receives appeals of wage orders
of $3,000 or less. Since the volume of these appeals is relatively small, OAH does not
expect the bill to significantly increase the number of wage order appeals; thus, OAH can
handle any increase in appeals with existing resources.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Judiciary (Administrative Office of the Courts); Maryland
Department of Labor; Office of Administrative Hearings; Department of Legislative
Services
Fiscal Note History: First Reader - January 14, 2020
mr/mcr Third Reader - February 4, 2020
Analysis by: Heather N. MacDonagh Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 119/ Page 3
 ANALYSIS OF ECONOMIC IMPACT ON SMALL BUSINESSES
TITLE OF BILL: Wage Payment and Collection - Order To Pay Wages
BILL NUMBER: SB 119
PREPARED BY: Mischelle Vanreusel for Matt Helminiak, Commissioner of Labor &
Industry
PART A. ECONOMIC IMPACT RATING
This agency estimates that the proposed bill:
_X_ WILL HAVE MINIMAL OR NO ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESS
OR
WILL HAVE MEANINGFUL ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESSES
PART B. ECONOMIC IMPACT ANALYSIS
SB 119/ Page 4


Statutes affected:
Text - First - Labor and Employment - Wage Payment and Collection - Order to Pay Wages: 3-507.1 Labor and Employment
Text - Third - Labor and Employment - Wage Payment and Collection - Order to Pay Wages: 3-507.1 Labor and Employment