- Maryland Employers Subject To Significantly Higher Damages For Overtime Violations And A New Administrative Claim Procedure
- September 3, 2010 | Authors: Meredith S. Abrams Campbell; Gregory D. Grant; Angela Hart-Edwards; Christine Hsu; Michael L. Kabik; Christopher C. Roberts
- Law Firms: Shulman, Rogers, Gandal, Pordy & Ecker, P.A. - Potomac Office ; Shulman, Rogers, Gandal, Pordy & Ecker, P.A. - Washington Office ; Shulman, Rogers, Gandal, Pordy & Ecker, P.A. - Potomac Office ; Shulman, Rogers, Gandal, Pordy & Ecker, P.A. - Washington Office ; Shulman, Rogers, Gandal, Pordy & Ecker, P.A. - Potomac Office
Maryland has amended its Wage Payment and Collection Law so that the definition of “wages” now includes overtime wages. This effect of the amendment, which goes into effect on October 1, 2010, is that the penalty for failure to pay overtime will increase signficantly in Maryland. Specifically, if a Maryland employer improperly fails to pay overtime to employees entitled to overtime (known as “non-exempt employees”), the employer may be liable for three times the amount of the overtime owed (as opposed to two times under federal law) plus the employee’s attorneys’ fees (which often can be much higher than the amount of overtime owed). Further, under Maryland law an employee can claim up to three years of back overtime liability (federal law provides for up to 2 years for a non-willful violation and 3 years for a willful violation). Thus, a Maryland employer that was previously subject to paying up to two (or possibly three) years of back overtime doubled may now be subject to paying up to three years of back overtime tripled.
Maryland also established a new administrative procedure, also effective October 1, 2010, for employees who have wage claims of up to $3,000. Those employees may now file such claims with the Maryland Division of Labor and Industry (“Division”). The Division has the authority to investigate the claim and, if it finds the wages are owed, issue an order requiring the employer to pay the wages. Employers are required to respond to the Division within 15 days after receiving notice of a claim.
Now more than ever, employers should review their employee classifications and payroll procedures to make sure (i) employees who are not being paid overtime satisfy the requirements of law to be ineligible for overtime and (ii) overtime is being paid properly to those employees eligible for overtime.