HB 123
Department of Legislative Services
Maryland General Assembly
2020 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
House Bill 123 (Delegate K. Young, et al.)
Economic Matters Finance
Labor and Employment - Wage History and Wage Range
This bill requires an employer to provide, on request by an applicant for employment, the
wage range for the position for which the applicant applied. The bill prohibits an employer
from seeking wage history information for an applicant, or from screening or considering
an applicant for employment or determining an applicant’s wages based on the applicant’s
wage history. However, an applicant is not prohibited from voluntarily sharing wage
history information with an employer. An employer may not retaliate against or refuse to
interview, hire, or employ an applicant because the applicant did not provide wage history
or requested the wage range. The bill includes civil penalties for employers who violate
specified provisions multiple times.
Fiscal Summary
State Effect: General fund expenditures increase by $220,300 in FY 2021. Out-year
expenditures reflect annualization and the phased elimination of contractual staff and
one-time start-up costs. Additionally, the bill may have a fiscal impact on recruiting and
hiring State employees. General fund revenues increase minimally from penalties.
(in dollars) FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
GF Revenue - - - - -
GF Expenditure $220,300 $142,000 $104,400 $106,300 $108,300
Net Effect ($220,300) ($142,000) ($104,400) ($106,300) ($108,300)
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: Local government operations are affected, and expenditures likely increase
minimally. Revenues are not affected.
Small Business Effect: Potential meaningful.
 Analysis
Bill Summary: After an employer makes an initial offer of employment that specifies
compensation to an applicant, an employer may rely on wage history voluntarily provided
by the applicant to support a higher wage offer only if it does not create an unlawful pay
differential based on protected characteristics. An employer may also seek to confirm the
wage history voluntarily provided to support a wage offer that is higher than the initial
wage offered by the employer.
An employer who violates the bill is not subject to the criminal penalty provisions of the
Equal Pay for Equal Work law, but if the Commissioner of Labor and Industry determines
that an employer has violated the bill, the commissioner must issue an order compelling
compliance. The commissioner may, in the commissioner’s discretion, issue a letter to the
employer compelling compliance and, for a second violation, may assess a civil penalty of
up to $300 for each applicant for whom the employer is not in compliance. That penalty
increases for each subsequent violation within three years (up to $600 for each applicant).
The commissioner must consider specified items when determining the amount of the
penalty, and assessment of the penalty is subject to specified notice and hearing
requirements.
Current Law: Maryland’s Equal Pay for Equal Work law applies to employees but not to
job applicants. Under the law, an employer may not prohibit an employee from inquiring
about, discussing, or disclosing the wages of the employee or another employee or
requesting that the employer provide a reason for why the employee’s wages are a
condition of employment. An employer may not require an employee to sign a waiver or
any other document to deny the employee the right to disclose or discuss the employee’s
wages. An employer may not take any adverse employment actions against an employee
for specified actions regarding wages or exercising specified rights.
An employer may, in a written policy provided to each employee, establish reasonable
workday limitations on the time, place, and manner for inquiries relating to employee
wages so long as it is consistent with standards adopted by the Commissioner of Labor and
Industry and all other State and federal laws. If an employee does not adhere to these
limitations, and the employer acted because of the employee’s failure to adhere to the
limitations, an employer may have an affirmative defense for taking adverse employment
action. A limitation may include prohibiting an employee from discussing or disclosing
another employee’s wages without that employee’s prior permission, except in specified
instances for an employee who has access to other employees’ wage information as a part
of the employee’s essential job functions.
These provisions do not (1) require an employee to disclose the employee’s wages;
(2) diminish employee rights to negotiate the terms and conditions of employment or
HB 123/ Page 2
otherwise limit employee rights; (3) limit the rights of an employee under any other
provision of law or collective bargaining agreement; (4) create an obligation on an
employer or employee to disclose wages; (5) permit an employee, without an employer’s
written consent, to disclose proprietary information, trade secret information, or
information that is a legal privilege or protected by law; or (6) permit an employee to
disclose wage information to an employer’s competitor.
State law generally prohibits an employer with at least 15 employees from discharging,
failing or refusing to hire, or otherwise discriminating against any individual with respect
to the individual’s compensation, terms, conditions, or privileges of employment because
of race, color, religion, sex, age, national origin, marital status, sexual orientation,
gender identity, genetic information, or disability. The State and local governments are
considered employers. Regardless of employer size, under the State’s Equal Pay for Equal
Work law, an employer may not discriminate between employees in any occupation by
(1) paying a wage to employees of one sex or gender identity at a rate less than the rate
paid to employees of another sex or gender identity if both employees work in the same
establishment and perform work of comparable character or work on the same operation,
in the same business, or of the same type or (2) providing less favorable employment
opportunities based on sex or gender identity. However, a variation in a wage based on
specified systems or factors is generally not prohibited.
When the Commissioner of Labor and Industry within the Maryland Department of Labor
(MDL) has determined that the State’s Equal Pay for Equal Work law has been violated,
the commissioner must (1) try to resolve any issue informally by mediation or (2) ask the
Attorney General to bring an action on behalf of the employee. The Attorney General may
bring an action in the county where the violation allegedly occurred for injunctive relief,
damages, or other relief.
If an employer knew or reasonably should have known that the employer’s action violates
Equal Pay for Equal Work provisions, an affected employee may bring an action against
the employer for injunctive relief and to recover the difference between the wages paid to
employees of one sex or gender identity who do the same type work and an additional equal
amount as liquidated damages. If an employer knew or reasonably should have known that
the employer’s action violates specified wage disclosure provisions, an affected employee
may bring an action against the employer for injunctive relief and to recover actual
damages and an additional equal amount as liquidated damages.
An employee may bring an action on behalf of the employee and other employees similarly
affected; that action must be filed within three years after the employee receives from the
employer the wages paid on the termination of employment.
HB 123/ Page 3
If a court determines that an employee is entitled to judgment in an action, the court must
allow against the employer reasonable counsel fees and other costs of the action, as well as
prejudgment interest in accordance with the Maryland Rules.
An employer who violates certain provisions of the Equal Pay for Equal Work law is guilty
of a misdemeanor and subject to a fine of up to $300. An employer who violates the
Equal Pay for Equal Work law at least twice within a three-year period may be required to
pay a civil penalty equal to 10% of the amount of damages owed by the employer.
State Revenues: General fund revenues increase minimally from penalties. The
Commissioner of Labor and Industry has discretion to assess a civil penalty of up to
$300 for each applicant for whom the employer is not in compliance for a second offense.
For each subsequent violation within three years, the penalty increases to up to $600 for
each applicant. Even though the frequency of penalty assessment cannot be predicted, the
increase in revenues is assumed to be minimal given the cap on the penalty amount.
State Expenditures: The bill creates additional responsibilities for the Division of Labor
and Industry within MDL by expanding the Equal Pay for Equal Work law to generally
prohibit employers from inquiring about the wage history of applicants. MDL cannot
absorb the additional workload within existing resources and requires additional staff to
respond to the increase in inquiries and complaints prompted by the bill.
MDL anticipates approximately 300 complaints and, therefore, anticipates needing
one wage and hour investigator and one contractual wage and hour investigator to respond
to and manage the additional workload created by the bill. Additionally, a part-time
contractual assistant Attorney General is needed to promulgate regulations in the first year.
Over time, it is anticipated that employer familiarity and compliance with the bill’s
provisions increase, thereby reducing the need for the contractual employees by fiscal 2023
and allowing MDL to respond to inquiries and enforce the bill with the one full-time
permanent position.
Accordingly, general fund expenditures increase for MDL by $220,305 in
fiscal 2021, which reflects the bill’s October 1, 2020 effective date. This estimate reflects
the cost of hiring one regular and one contractual wage and hour investigators to investigate
and process complaints and one part-time contractual assistant Attorney General to
promulgate regulations. It includes salaries, fringe benefits, one-time start-up costs (which
include changes to the management information system), and ongoing operating expenses.
HB 123/ Page 4
 Regular Position 1.0
Contractual Positions 1.5
Regular Salary and Fringe Benefits $41,860
Contractual Salaries and Fringe Benefits 53,122
One-time Start-up Costs 111,631
Ongoing Operating Expenses 13,692
Total FY 2021 MDL Expenditures $220,305
Future year expenditures reflect the phased elimination of the contractual positions,
full salaries with annual increases and employee turnover, and ongoing operating expenses.
If the volume of inquiries or complaints exceeds expectations, the contractual wage and
hour investigator position could be extended or converted to regular status.
This estimate does not include any health insurance costs that could be incurred for
specified contractual employees under the State’s implementation of the federal
Patient Protection and Affordable Care Act.
The Office of Administrative Hearings can process cases with existing resources.
The bill has an operational impact, and potentially a fiscal impact, on recruiting and hiring
State employees. Currently, if an applicant or current State employee applying for a new
position requests a salary above the base salary due to the applicant’s salary history, proof
of the salary is requested. Under the bill, the State is prohibited from confirming the wage
history information voluntarily provided from an employee until after the employer has
made an initial wage offer. Without being able to verify the salary information prior to an
initial wage offer, the State may have to offer the lowest salary in the salary grade or offer
a higher than justifiable wage. The bill may hinder the ability of State agencies to hire the
most qualified candidates or it may prolong the wage negotiation process when hiring new
employees. Additionally, recruitment systems may need to be modified to not request
salary information and appointing authorities may need to retrain their staff to ensure
compliance with the bill.
Local Expenditures: Local governments are generally restricted from seeking or relying
on wage history. Thus, the bill has an operational impact, and potentially a fiscal impact,
on recruiting and hiring local government employees similar to that described above for
the State.
Small Business Effect: Small businesses may need to alter their job applications,
including any online programs that ask for the wage history of an applicant. Employees
who conduct interviews or who are involved in the hiring, recruitment, or salary negotiation
process may need to be trained and made aware of the bill. The bill may prolong the wage
negotiation process when hiring new employees because an employer may not confirm the
HB 123/ Page 5
wage history voluntarily provided by an applicant until after an initial offer of employment
with an offer of compensation is made.
Additional Information
Prior Introductions: A similar bill, HB 634 of 2019, received a hearing in the
House Economic Matters Committee, but no further action was taken. Its cross file,
SB 738, received a hearing in the Senate Finance Committee, but no further action was
taken.
Designated Cross File: SB 217 (Senator Lee, et al.) - Finance.
Information Source(s): Maryland Association of Counties; Maryland Municipal League;
Judiciary (Administrative Office of the Courts); University System of Maryland;
Department of Budget and Management; Maryland Department of Labor;
Maryland Department of Transportation; Office of Administrative Hearings; Department
of Legislative Services
Fiscal Note History: First Reader - January 29, 2020
rh/mcr Third Reader - March 15, 2020
Revised - Amendment(s) - March 15, 2020
Analysis by: Heather N. MacDonagh Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 123/ Page 6


Statutes affected:
Text - First - Labor and Employment - Wage History and Wage Range: 3-101 Labor and Employment, 3-304.2 Labor and Employment, 3-304 Labor and Employment, 3-307 Labor and Employment, 3-308 Labor and Employment, 3-304.2 Labor and Employment
Text - Third - Labor and Employment - Wage History and Wage Range: 3-101 Labor and Employment, 3-304.2 Labor and Employment, 3-304 Labor and Employment, 3-307 Labor and Employment, 3-308 Labor and Employment, 3-304.2 Labor and Employment