Maryland: Updates to Non-Compete Prohibitions and Pay Transparency Requirements
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APPLIES TO Certain Employers with Employees in MD |
EFFECTIVE As Indicated |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
The Maryland Governor recently signed two pieces of legislation that will impact pay transparency and non-compete requirements in the state. Each is summarized below.
Non-Compete Agreements for Veterinary and Healthcare Professionals
Under HB 1388, non-compete and conflict-of-interest clauses are prohibited for certain veterinarian and health care professionals in the state of Maryland. Maryland already limits non-compete restrictions for lower-wage workers, and this new law continues a trend of narrowing the scope of employees who may be subject to a non-compete. The law becomes effective for covered veterinary practitioners and technicians on June 1, 2024, and for covered health care providers on June 1, 2025.
Specifically, the law prohibits non-compete provisions for individuals who are: (1) required to be licensed under Maryland’s Health Occupations Article (e.g., physicians, physician assistants, nurse practitioners, nurses, dentists, pharmacists, psychologists, optometrists, etc.), employed in a position that provides direct patient care, and earn equal to or less than $350,000 in total annual compensation; or (2) licensed as a veterinary practitioner, veterinary technician pursuant to Title 2, Subtitle 3 of Maryland’s Agriculture Article.
In addition, for covered health care providers who earn more than $350,000 in total annual compensation, the law states that covenants for these higher-earning health providers cannot exceed one year from the last day of employment and may not restrict the provider from working a geographic region greater than 10 miles from their primary place of employment. The law also provides that employers must provide notice to patients of higher-earning providers, if asked, about the new location where the provider will be practicing.
Pay Transparency Requirements
Under HB 649, and effective October 1, 2024, employers will be required to include a wage range and a general description of the benefits and other compensation offered for a position in any public or internal job posting. If a job posting was not made available to an applicant, an employer will be required to share the pay and benefits information before discussing compensation with the applicant, and at any other time upon the applicant’s request.
The law applies to any position that will be physically performed at least partly in Maryland. A disclosed wage range must be set in good faith by reference to: (1) any applicable pay scale; (2) any previously determined pay range for the position; (3) the pay range of an individual holding a comparable position at the time of the posting; or (4) the budgeted amount for the position.
The law directs the Maryland Division of Labor and Industry to develop a form that employers can use to communicate the required pay and benefits information. Employers will be able to comply with the law by including the completed form in each public or internal job posting and otherwise making it available to applicants as required.
Employers must keep a record of their compliance with the new pay disclosure requirements for each position for at least 3 years after the position is filled, or if the position is not filled, for 3 years from when the position was initially posted. The law does not include any other detail regarding specific documentation employers will need to maintain to demonstrate their compliance. The law also includes an anti-retaliation provision, prohibiting employers from refusing to interview, hire, or employ an applicant, or promote or transfer an existing employee because they requested information on wage ranges, or for refusing to provide their wage history, or for exercising any other right under the law.
Action Items
- Review employment agreements with legal counsel to determine compliance with expanded non-compete prohibitions.
- Review job postings to determine compliance with pay transparency requirements and establish procedures to comply with pay transparency recordkeeping requirements.
- Have appropriate personnel trained on the requirements.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase