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2012 Maryland Legislative Round-Up

  • June 5, 2012

The 430th legislative session of the Maryland General Assembly resulted in several new laws and amendments to existing laws that affect employers.  We summarize the more noteworthy legislation in this article.  All laws are effective October 1, 2012, unless otherwise noted. 

In this article:

Limits to Accessing Applicants’ and Employees’ Social Media Accounts
Rights Not to Work Certain Hours in Conjunction with Jury Service
Unemployment Insurance Coverage Extended to Victims of Domestic Violence
Workplace Fraud Act Amended
New Law Creates a Union-Employee Privilege
Maryland’s Same Sex Marriage Law
Workplace Bills Expected to Reappear in Next Session

 

Limits to Accessing Applicants’ and Employees’ Social Media Accounts

Maryland became the first state to enact legislation prohibiting employers from requesting or requiring an employee or applicant to disclose any user name, password, or other means for assessing any Internet- or electronic-based account.  The legislation was prompted by the practice of the Department of Safety and Correctional Services (“DSCS”) in 2010 and 2011 of asking prospective employees for their user names and passwords to social media websites as part of its background investigation process.  The DCSC discontinued the practice after an employee claimed that the practice was a violation of his personal privacy.
 
Covered Employers.  All private and public employers are covered.  “Employer” includes agents, representatives, and designees of the employer.
 
Prohibitions.  Employers are prohibited from requesting or requiring an employee or applicant to disclose a user name, password, or any other means of accessing a personal account or service through an “electronic communications device” (defined as “computers, telephones, personal digital assistants, and other similar devices”).  Employers are prohibited from failing or refusing to hire an applicant and discharging, disciplining, “or otherwise penalizing,” or threatening such adverse actions for an employee’s refusal to disclose any user names and passwords relating to a personal account or service.  Finally, employees may not download an employer’s proprietary information or financial data to their personal website, an Internet site (e.g., Facebook), or a similar account. 

Acts Not Prohibited.   Employers may require an employee to disclose any user names, passwords or other means for accessing an employee’s “non-personal” accounts related to the employer’s computer or information systems.  Further, employers are not prohibited from acting upon and investigating information it may receive regarding an employee’s unauthorized downloading of proprietary or financial data or conducting an investigation for the purposes of ensuring compliance with applicable securities or financial law or regulatory requirements. 

The law does not provide for a separate cause of action.  Therefore, a violation of the law may give rise to a tort claim, such as for wrongful discharge, in violation of public policy.

Rights Not to Work Certain Hours in Conjunction with Jury Service

Currently, an employer may not require an employee to use accrued leave when responding to a summons for jury service. Employers also are prohibited from taking or threatening to take any adverse action against an employee for fulfilling his or her jury service obligations. 

The new law expands employee rights by prohibiting employers from requiring an employee who is summoned and appears for jury service for four or more hours, including travel time, to work a shift that begins: (1) on or after 5 p.m. on the day of the employee’s appearance for jury service; or (2) before 3 a.m. on the day following the employee’s appearance for jury service. 

An employer who violates the law may face a civil suit for wrongful discharge, exposing the employer to liability for lost wages. 

Unemployment Insurance Coverage Extended to Victims of Domestic Violence

Under the new law, unemployment insurance claimants who left their employment because of domestic violence will be treated as having left their employment voluntarily and for “good cause.” This means such claimants will be entitled to unemployment benefits.  Benefits paid to claimants under these conditions will not be charged against the employer’s earned rating record.

The “good cause” for voluntarily leaving employment must be attributable directly to the employee, or the employee’s spouse, minor child, or parent being a victim of domestic violence.  Further, the employee reasonably must believe that continued employment would jeopardize his or her safety or the safety of the employee’s spouse, minor child, or parent.  Additionally, to obtain benefits, the claimant must provide documentation to the Department of Labor, Licensing and Regulation (“DLLR”), e.g., an active or recently issued temporary protective order or any other court order documenting the domestic violence or a police record documenting recent domestic violence. 

Unless otherwise required by law, the DLLR is prohibited from disclosing any information regarding the documentation a claimant provides in support of his or her benefits claim.  The DLLR, in general terms, may notify an employer that a claimant left employment because of domestic violence.  Additionally, the DLLR may disclose to an employer information that a claimant provides if the employer can demonstrate its need for the information outweighs the claimant’s privacy interests, and it is unable to obtain the information from another source.  Before disclosing any information, the DLLR must notify the claimant and redact any “unnecessary identifying information.” 

Workplace Fraud Act Amended

The Workplace Fraud Act of 2009 was enacted to target worker misclassification and give the DLLR the power to investigate complaints of misclassification in the construction and landscaping industries.  As enacted, the Act creates a presumption that an employer-employee relationship exists whenever a payment is made for performance of services.  It is the employer’s burden to prove otherwise. 

Under the 2012 amendment, effective July 1, 2012, the presumption will not apply if an employer produces all of the following documents related to an independent contractor’s business to the DLLR upon request:

  • A written contract, signed by the employer and the business entity that describes:
    • the nature of the work;
    • the remuneration to be paid; and
    • includes an acknowledgement by the business entity regarding the entity’s obligations under the Act to withhold, report, and remit payroll taxes on behalf of its employees, pay unemployment insurance taxes for its employees, and maintain workers’ compensation insurance;
  • An affidavit signed by the business entity indicating it is an independent contractor and is available to work for other businesses;
  • A current certificate of status for the business entity issued by the State Department of  Assessments and Taxation showing the entity is in good standing; and
  • Proof that the business entity holds all state- and local-required business or occupational licenses.

Additionally, the employer must provide each individual classified as an independent contractor a written notice of the classification that explains the implications of the classification.  The amendment also extends the time for complying with any DLLR request for records from 15 to 30 days after the DLLR’s request, or as mutually agreed upon.  This change may help employers avoid the $500 per day fine for non-compliance with a records request.  Employers in the construction and landscaping industries should assess their relationships with independent contractors and prepare to defend against any DLLR audit. 

New Law Creates a Union-Employee Privilege

A new law prohibits labor unions and their agents from being compelled to disclose certain information acquired in confidence from an employee in the course of an agent’s duties.  The communication must relate to the employee’s grievance, and the grievance must be subject to an investigation, grievance proceeding, or a civil court, administrative or arbitration proceeding.  The privilege protects the communication itself, not the underlying facts.  Additionally, it survives the employee’s separation from employment and the union’s representation of the employee.

The law provides for the following exceptions:

  • It does not apply in a criminal proceeding.
  • The union must disclose communications to the employer to the extent the union believes it necessary to prevent certain death or substantial bodily harm. 
  • The union may disclose communications where the union reasonably believes it necessary:
    • To prevent the employee from committing a crime, fraud, or violation of the collective bargaining agreement (“CBA”) between the employer and the union, which reasonably is certain to cause substantial injury to the financial interests or property of any person or entity, and in furtherance of which the employee has used the services of the union or its agent;
    • To prevent, rectify, or mitigate substantial injury to an entity’s financial or property interests resulting from a criminal or fraudulent act by an employee, in furtherance of which the employee has used the services of the union or its agent;
    • To secure legal advice regarding compliance with a court order or the CBA;
    • To establish a claim or defense in a legal action or dispute between the employee and the union;
    • To comply with a court order or the CBA; or
    • To the extent the communication is an admission that the employee committed a crime.
  • It does not apply in any court, arbitration, and/or agency proceeding against the union or the union’s agent.
  • It does not apply where the union obtained written or oral consent from the employee to disclose the communication.
  • It does not apply where the employee (or the employee’s estate or guardian) has waived the privilege.
  • It does not apply when required by court order.

The law applies prospectively and may not be construed to have any effect on or application to any CBA or contractual agreement in effect on October 1, 2012, or any communication received or acquired by a labor organization/agent before the bill’s October 1, 2012, effective date. 

Generally, under the federal National Labor Relations Act, unions and employers are subject to a duty to furnish information to each other.  In some situations, the NLRA requires a union to provide information or documentation to an employer that it receives from an employee, even if the employee does not consent to the disclosure; if the union fails to do so, it violates the NLRA.  The new law contains a “savings clause,” providing that in the event of a conflict between the privilege and any federal or state labor law, the labor law will control. 

Maryland’s Same Sex Marriage Law

Maryland employers must ensure their employee benefit policies and plan documents regarding dependent coverage are in compliance with a new law legalizing same-sex marriage.  The law goes into effect on January 1, 2013.  It, however, may be repealed in November, before it is effective.  Opponents are preparing to take the bill to a statewide voter referendum in the November election, and it is possible that an amendment to the State constitution would be on the November ballot to define marriage as between a man and a woman.

If the law becomes effective, it will be in conflict with federal laws and regulations, adding another layer of complexity for employers and plan administrators as they navigate and apply the different tax and other rules to the same benefits.

What the Law Achieves.  The law modifies language in state law to provide that “only a marriage between two individuals who are not otherwise prohibited from marrying” is valid in Maryland.  It also specifies that individuals may not marry their parents, children, siblings or grandparents, grandchildren, stepparents, nephews, nieces, aunts or uncles.  Further, the law includes protections for religious groups and churches, generally providing that these organizations are not required to conduct same-sex marriages in violation of their doctrines, cannot be fined or penalized for refusing to conduct same-sex weddings, and cannot be mandated to provide services, accommodations, advantages, facilities, goods or privileges related to a marriage that violates the organizations religious beliefs.

Implications.  Employers should prepare to accommodate same-sex spouses in their benefit plans and human resources policies, and set up the structure to manage the inherent complexities brought on by the conflicts between state and federal law.  For example, benefits provided to same-sex spouses will have the same tax breaks under state law as benefits provided to opposite-sex spouses; however, the value of benefits provided to same-sex spouses are taxable income for purposes of federal law.  In May 2012, Maryland’s highest court decided that same-sex couples who have a valid marriage from another state have the right to divorce in Maryland even though Maryland does not yet permit same-sex marriages.  The decision can be overturned only by the legislature (not by referendum), which is not likely.

Workplace Bills Expected to Reappear in Next Session

Working Families Flexibility Act (HB 1159). This bill would have provided employees with the right to apply to employers in writing for a change in terms and conditions of employment (e.g., hours and location of work).  Private employers would have been required to meet with the employee who applied and provide him or her with written decision within 14 days. 

Housing DiscriminationSource of Income (HB 168/SB 277). This bill would have added “source of income” as a protected category under Maryland’s housing discrimination law.

Religious Observance Accommodation Act (HB 676). This bill would have required an employer to allow employees to use any type of accrued leave to observe a holy day in accordance with a sincerely held religious belief, unless it would create an “undue hardship.”  This bill also was defeated in the 2011 legislative session. 

Employment and State Procurement – Use of Federal E-Verify Program (HB 355).  Generally, this bill would have established the Office of Employment Verification Assistance in the Division of Labor and Industry and require public and private employers (initially, those with more than 500 employees in the State) to use the federal E-verify system.

Abusive Work Environments – Employee Remedies (SB 999).  This bill would have prohibited workplace bullying by supervisors or other employees/co-workers, and supervisors and employees would have been subject to individual liability.

Leave – Deployment of Members in Armed Forces (SB 1028). This bill would have provided employees with the right to take leave from work on the day an immediate family member is leaving for, or returning from, active duty and would have prohibited employers from requiring an employee to use accrued leave when taking such leave.

Human Relations – Sexual Orientation and Gender Identity Anti-Discrimination (SB 212).  This bill would have prohibited discrimination based on gender identity with regard to public accommodations, housing, and employment, and would have defined “gender identity” as a “persistent, bona fide gender-related identity and the consistent, public manifestation of that identity in the gender-related appearance of an individual regardless of the individual’s assigned sex at birth.”

Employment Discrimination – Employment Status (SB 966).  This bill proposes to add “employment status” as a protected category under Maryland’s anti-discrimination law.  “Employment status” would have meant status of an applicant as employed or unemployed.

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Employers should review their policies and practices to ensure consistency with the new laws, and educate their managers and supervisors regarding the new restrictions.  Jackson Lewis attorneys are available to answer inquiries regarding these and other workplace developments.

©2012 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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