2019 Year in Review and 2020 Forecast: Employment Law Updates in D.C., Maryland, and Virginia

Over the past year, there were a number of changes in the employment law landscape throughout the District of Columbia, Maryland, and Virginia.  To keep employers apprised of the latest developments in these jurisdictions, below is a recap some of the key laws that took effect or were enacted in 2019 and a forecast of potential changes on the horizon in 2020.

DISTRICT OF COLUMBIA

shutterstock_DCTipped Wage Workers Fairness Amendment Act of 2018 Not Fully Funded: The D.C. City Council enacted the Tipped Wage Workers Fairness Amendment Act in October 2018, which had the immediate impact of repealing Ballot Initiative 77 – a voter-approved ballot that eliminated the use of the tip credit in D.C.  Thus, employers with tipped employees are still permitted to take a tip credit toward meeting minimum hourly wage requirements.  But the Act also imposes certain training, reporting, and notice requirements for all employers of tipped employees – many of which have yet to take effect due to the lack of funding.

As explained in our previous blog article, the Act imposes certain training and notice requirements on all employers of tipped employees.  The date on which employers must implement sexual harassment prevention training and provide the requisite notice to tipped employees, however, has not yet been determined, as a majority of the Act’s requirements have not been approved through budget funding.  To date, the only provisions of the Act that are in effect, besides the repeal of Ballot Initiative 77, are related to employee and manager training on D.C.’s Minimum Wage Act Revision Act, certain notices to employees regarding their tips, and third-party payroll and wage reporting requirements (beginning Jan. 1, 2020).  Employers should monitor this law throughout 2020, as it will likely be funded sometime next year.

Employees Can Claim D.C. Paid Leave Act Benefits Beginning July 1, 2020: D.C.’s Universal Paid Leave Amendment Act of 2016 (“Paid Leave Act”) provides up to eight weeks of parental leave to bond with a new child, six weeks of family leave to care for an ill family member with a serious health condition, and two weeks of medical leave to care for one’s own serious health condition.  D.C. employees who take paid leave will be eligible to receive up to $1,000 per week, depending on their wage level.  The leave program is funded by a quarterly 0.62% payroll tax on businesses that  expected to generate a total of $250 million each year.

July 1, 2019 marked the date on which the District began collecting taxes from employers in preparation to administer paid leave benefits beginning on July 1, 2020.  Employers should ensure that they have the Paid Family Leave Notice posted in their workplace, along with other labor law posters, by February 1, 2020, and ensure that all new employees hired after February 1, 2020 are provided with an electronic or hard copy of the notice.  The proposed benefits regulations that contain instructions on how employees file for benefits are being finalized by the D.C. Department of Employment Services (“DOES”) and are expected to be rolled out in the next few months.  Employers should familiarize themselves with this rule and the anticipated regulations, especially if they have not paid the quarterly taxes that DOES began collecting six months ago.

For further details on the D.C. Paid Leave Act and employer obligations, please check out our prior blog post.

Minimum Wage Increase in 2020: Under D.C.’s Fair Shot Minimum Wage Amendment Act of 2016, the minimum wage in the District of Columbia increased from $13.25 per hour to $14.00 per hour on July 1, 2019, and the base minimum wage for tipped employees increased from $3.89 per hour to $4.45 per hour.  The law also provides for a progressive increase to $15.00 per hour on July 1, 2020, and a base increase of $5.00 per hour for tipped employees.

Drug Testing/Marijuana Updates Expected in 2020: The D.C. City Council is considering two bills that would eliminate drug testing employees for marijuana.  Possession of marijuana and its recreational use is legal in D.C., and many employees have a valid prescription for medicinal marijuana.  However, under current law, employees can still be disciplined at work if they test positive for marijuana.

The Prohibition of Marijuana Testing Act of 2019 proposes to eliminate marijuana testing as a condition of employment unless required by law.  The second bill, the Medical Marijuana Program Patient Protection Amendment Act of 2019, would prohibit discriminating against D.C. government employees who are enrolled in the medical marijuana program, and would do away with marijuana testing on such employees who have a valid prescription under the program.  This rule was already rolled out as emergency legislation in June 2019 but only went into effect for 90 days.  Although neither of these laws are final, and private sector employers have not been impacted by these proposals yet, it is certainly something to keep a close eye on.  Many states across the country have already, or are beginning to, incorporate employee protections in marijuana legislation, which significantly alters traditional employer policies, procedures, and practices related to drugs and drug testing policies.

MARYLAND

shutterstock_MarylandLaw Regarding Noncompete and Conflict of Interest Clauses Imposed Restrictions on Employment Agreements: A new Maryland law that went into effect on October 1, 2019 prohibits employers from including noncompete or conflict of interest clauses in any employment contract with an employee earning $15 or less per hour or $31,200 or less annually.  Such provisions are considered void as against public policy.  However, the bill specifically provides that employers may still prohibit such employees from taking client lists or other proprietary client-related information.  Employers should carefully review their employment agreements with employees who are considered lower wage earners and revise them, as necessary, to ensure that company interests are protected while still complying with the law.

Workplace Harassment Amendment Expanded Scope of Liability for Employers: On October 1, 2019, under HB 679/SB 872, several changes to Maryland’s anti-discrimination law went into effect, which vastly expanded the scope of liability for employers under State law.  For instance, the definition of “employee” was expanded to include independent contractors; the definition of “employer” was revised to increase the scope of liability for cases of harassment from any employer with 15 or more employee to any employer with a single employee; and a definition of harassment was specifically provided in the statute.  Additionally, the time period for filing a complaint of harassment with the local human rights commission was expanded from six months to two (2) years, and the time period for filing a lawsuit alleging harassment in violation of the state anti-discrimination law was expanded from two (2) years to three (3) years.  Employers should be wary of these changes to Maryland’s discrimination laws, as it certainly expands the risk of employer liability in Maryland and makes Maryland courts a more attractive forum to pursue such claims.

Equal Pay Law Penalties Increased: Penalties for Maryland’s Equal Pay for Equal Work law increased on October 1, 2019.  Employers found to have violated the law two (2) or more than three (3) times within a three-year period may be assessed a penalty equal to 10% of the damages owed by the employers, which are paid into the General Fund of the State of Maryland.

Organ Donation Leave: Under the HB 1284, which took effect on Oct. 1, 2019, employers with 15 or more employees are required to provide eligible employees (employed for at least 12 months and at least 1,250 hours during the previous 12 months) up to 60 business days of unpaid leave in any 12-month period to serve as an organ donor, and up to 30 business days of unpaid leave in any 12-month period to serve as a bone marrow donor.  Employers should consider adding a new provision to their leave policies in their Employee Handbooks and pay particularly close attention to any requests from employees for time off to donate an organ or bone marrow.  Notably, such organ donor leave does not run concurrently with leave taken pursuant to the Family and Medical Leave Act.

Ban the Box Legislation Vetoed by Governor Hogan: Legislation passed by the Maryland General Assembly prohibiting employers with 15 or more employees from asking about an applicant’s criminal record prior to the first in-person interview was vetoed by Governor Larry Hogan in May 2019.  Note, however, that there are several local ban-the-box laws throughout Maryland, including those enacted by Baltimore City, Prince George’s County, and Montgomery County – all of which provide greater restrictions on employers than what was proposed under the proposed bill.

Minimum Wage Increase in 2020: Beginning on Jan. 1, 2020, the minimum wage in Maryland will increase from $10.10 per hour to $11.00 per hour.  Please note, however, that employers in Montgomery County, MD and Prince George’s County, MD are subject to separate, higher minimum wage rates, which may also vary depending on the size of the employer.

Maryland OSHA Still Has Not Adopted the E-Recordkeeping Rule: Maryland OSHA (“MOSH”) is the only state-plan safety and health agency in the country that has not adopted federal OSHA’s e-Recordkeeping Rule, which was promulgated back in May 2016.  Under the revised federal rule issued in January 2019, which MOSH is required to adopt, establishments with 250 or more employees and establishments with 20 or more employees in high hazard industries are required to submit their 300A data by March 2nd of every year through federal OSHA’s Injury Tracking Application.  Covered establishments should closely monitor this rule and be prepared to submit their 300A data, as it is will likely be finalized prior to the upcoming March 2, 2020 data submission deadline.

VIRGINIA

shutterstock_Virginia (1)Repeal of Jim Crow-era Minimum Wage Exemptions: HB 2473 was enacted in March 2019 in an effort to modernize Virginia’s minimum wage law and to repeal certain Jim Crow-era provisions that endorsed wage discrimination against African Americans.  The legislation rescinded exemptions that allowed employers to pay less than the minimum wage to newsboys, shoeshine boys, ushers, doormen, concession stand attendants, cashiers in theaters, and babysitters who work 10 hours or more per week.

Written Wage Statements Now Required in Virginia: Beginning on January 1, 2020, Virginia employers (with the exception of agricultural employers) must provide paystubs to employees on each regularly scheduled payday.  Virginia Code § 40.1-20 was amended in April 2019 to require employers to provide a written statement by pay stub or online, which must include the following:

  1. The name and address of the employer;
  2. The number of hours the employee worked during the pay period;
  3. The employee’s rate of pay;
  4. The gross wages earned by the employee during the pay period; and
  5. The amount and purpose of any deductions.

Given that the current law only requires employers to provide a written statement of employees’ gross wages and any deductions upon request, this may be a significant change for many employers.  It is prudent to take steps to ensure that accurate pay stubs are provided beginning on January 1, 2020.  Employers that already issue pay stubs should review their current payroll systems to verify that all of the code’s requirements, as listed above, are included in employee pay stubs.

Bi-Partisan Bill Limiting Non-Compete Agreements Not Put Up for Vote: A proposed bill that prohibits employers from entering into, enforcing, or threatening to enforce non-compete agreements with low-wage workers passed the Senate and House Commerce and Labor Committee.  But the General Assembly did not put this bill up for a vote in the House during the last legislative session.  Virginia employers should pay close attention to this bill moving forward, as it has bi-partisan support and other states have have continued to enact similar provisions, including Maryland.

Efforts to Increase Minimum Wage Fall Short: At least four bills were introduced in the General Assembly in 2019 to raise Virginia’s minimum wage, which is currently set at the federal floor of $7.25 an hour.  Most of these bills were left in committee.  One bill that did pass the Senate Commerce and Labor Committee would have mandated annual increases to the hourly minimum wage, raising it to $8 this year and reaching a final rate of $11.25 in 2022.  Another bill that would have increased the minimum wage to $10 this year, $13 next year, and $15 by 2021 made it through committee but was then struck down by a Senate vote of 21-19.  While none of these bills managed to increase the state minimum wage, efforts to increase the state minimum wage will certainly be an agenda item during the next legislative session.  Given the narrow split on the issue, it is only a matter of time before Virginia’s minimum wage increases.

Marijuana Legislation at the Forefront of Issues for 2020: Currently, marijuana is strictly prohibited in Virginia and previous marijuana legislation efforts in the General Assembly have failed.  However, with the advent of the November 2019 elections and democrats now controlling both the House of Delegates and the Senate, it appears that marijuana legislation is on the horizon.

Delegate Lee Carter pre-filed a bill (HB 87) for the 2020 legislative session that would decriminalize marijuana and allow adults 21 and older to possess and purchase cannabis from licensed retailers.  Additionally, the bill would impose a 10 percent tax to fund veteran initiatives, transportation, and local municipalities.  The bill also contains specific prohibited employment practices, which appear to limit an employer’s ability to discipline employees for use of marijuana outside of the workplace.  Finally, Democratic Attorney General Mark Herring recently held a “Cannabis Summit” in Richmond to discuss decriminalizing marijuana and comprehensive marijuana reform, which includes recreational legalization.  This topic is gaining significant attention heading into 2020, so employers should pay close attention to the bill pre-filed with Virginia General Assembly.

Novel Legislation: Maryland’s Disclosing Sexual Harassment in the Workplace Act of 2018

harassmentWith the rise of the #MeToo movement, there have been a number of responses from both employers and state legislatures to address workplace harassment.  As discussed during the EEOC Special Task Force Meeting on June 11, 2018, several state legislatures are taking proactive steps to combat workplace sexual harassment.  For example, on May 15, 2018, Maryland Governor Larry Hogan signed and ratified the Maryland Disclosing Sexual Harassment in the Workplace Act of 2018 – which passed the Maryland House (46-0) and Senate (136-1) with almost unanimous support.

The Act, which goes into effect on Continue reading

Maryland Employers Beware — Paid Sick Leave is Quickly Approaching

On January 12, 2018, the Maryland General Assembly overrode Gov. Larry Hogan’s veto to pass the Maryland Healthy Working Families Act (the “Act”), and in so doing, Maryland became the ninth state in the country to require paid sick and safe leave for qualifying employees. shutterstock_fever sick

Pursuant to the Act, any business in Maryland with 15 or more employees during the preceding year, including part-time, full-time, temporary, and seasonal workers, must provide their workforce with paid sick leave.  Maryland employers with 14 or fewer employees are also required, at a minimum, to provide employees with unpaid sick and safe leave.

The Act currently is scheduled to take effect as of February 12, 2018.  However, on January 23, 2018, as a result of concerns expressed by various lawmakers that employers would not have a sufficient amount of time to come into compliance with various provisions of the Act, Senator Thomas Middleton, the chief sponsor of the law, introduced a bill that would delay enforcing requirements of the law until mid-April.  Senator Middleton stated that the delay in enforcement would give labor officials the requisite time to draw up necessary regulations and to spread the word to companies that are affected.  He also emphasized that he wanted to “hold harmless” companies that are figuring out the details of how to set up their sick leave programs, and that “ninety days should give the administration enough time to get a guide together.”

Continue reading

EEOC and State Legislatures Focus on Pay Equity and Transparency

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If there is one issue that has remained a hot topic in employment news throughout 2016, it is pay equity and transparency.  These topics have not only garnered attention at the federal level but at the state level as well.

The EEOC proposed significant changes to the EEO-1 report, a mandated compliance survey containing employment data, where it will begin collecting pay data based on certain demographic criteria in 2017.  Additionally, many states, including Maryland, are taking their own steps to ensure pay equity in the workplace.  These laws will likely trigger significant enforcement efforts by federal agencies and the states; thus, employers should be prepared to respond to investigations into their pay practices.  However, employers can take several steps to help limit potential liability over the next year.

New EEO-1 Report Requirements

In February 2016, the EEOC announced a major revision to the Employer Information Report (EEO-1) requiring all employers with more than Continue reading

Paid Sick Leave Set to Become Effective in Montgomery County, Maryland

health-care-costs-2In 2015, Montgomery County implemented Maryland’s first paid sick and safe leave statute, The Earned Sick and Safe Leave Law, which becomes effective on October 1, 2016.  The law applies to all employees that perform work in Montgomery County.  Under the law, employees who work for employers with 5 or more employees earn sick and safe leave at a rate of one hour for every 30 hours of work in Montgomery County, up to 56 hours or approximately 7 days of leave per calendar year.  Employees who work for employers with fewer than 5 employees must earn one hour for every 30 hours worked in Montgomery County, but only up to 32 hours or approximately 4.5 days per calendar year.

As has been seen in similar paid leave laws developing throughout the country, under Montgomery County’s statute leave can be used for (1) medical care of employee or employee’s family member; (2) closure of employer’s place of business or school/child care by order of a public official due to public health emergency; (3) care of a family member with a communicable disease that could jeopardize the health of others; or (4) obtaining medical or legal services for or participation in a proceeding related to domestic violence, sexual assault or stalking committed against the employee or the employee’s family member.

Similar to DC’s paid sick and safe leave law, employees must begin accruing leave on their first date of employment, but may be prohibited from using the leave during the 90-day initial probationary period.  Employers must permit leave to be carried over from year to year (up to 56 hours), but can cap use of accrued and carried-over leave to 80 hours per calendar year.  The law also requires employers to provide a written statement of available sick and safe leave to employees each time wages are paid.

Pursuant to this law, an employer must notify employees of their entitlement to leave by posting and in its written policies, usually the employee handbook.  Although this may require some employers to implement a new policy, many employers may already have policies that meet these basic requirements.  A general PTO policy that permits accrual of paid leave at the same or a greater rate and use of the paid leave for any reason, may simply need to be updated to encompass all of the permitted uses of leave, an anti-retaliation statement, and information about the employee’s rights to file a complaint.  Employers also should ensure accrual is not prohibited.  Policies must be carefully reviewed and revised, if necessary, to meet the qualifications of this law by or before October 1st.

This shift in the law is especially significant because of what it reflects for Maryland as a whole.  Maryland’s Healthy Working Families Act has gained renewed momentum in light of Montgomery County’s law and a similar law currently being considered in Prince George’s County.  The Act would similarly provide full-time employees up to 7 days of paid sick and safe leave and would, as it’s currently written, apply to all employers with 10 or more employees.  Employers with 9 or fewer employees would have to provide unpaid leave.  Although this proposed law has been introduced and reintroduced multiple times without success, there may be enough support in the state to push it through the Maryland government based on the implementation of one such law within the state already.

Medical Marijuana and an Employer’s Rights in DC, Maryland, and Virginia

The District of Columbia, Maryland, and Virginia have all taken steps toward legalizing
marijuana in some form.  However, these laws differ in many respects and raise
some interesting questions for employers.  Because medical marijuana continues to be illegal under federal law, pursuant to the Controlled Substances Act, courts residing in jurisdictions where the use of medical marijuana is legal have found that an employer may maintain a drug-free workplace dreamstime_l_41623799 (1)and terminate an employee for failing a drug test.

While some states such as Arizona specifically provide protections for employees that have a valid prescription for medical marijuana, neither the District of Columbia, Maryland nor Virginia have such specific protections in their respective statutes.  The lingering questions is whether an employer’s decision to take an adverse action against an employee for using medical marijuana is protected under the Americans with Disabilities Act (“ADA”) or a state’s disability discrimination statute, or under public policy.  To date, however, courts have ruled that, absent statutory protections, employers remain free to set their own drug policies and to discipline or terminate employees who violate those policies.

This article details the medical marijuana laws in the District of Columbia, Maryland, and Virginia, and addresses the current legal landscape regarding an employee’s use of medical marijuana and employment law.  Employers should evaluate their current drug policies, and continue to monitor the changing landscape surrounding the use of medical marijuana.  As some states do provide specific protections for employee’s use of Continue reading