The Maryland General Assembly recently amended the Maryland Wage Payment and Collection Law (MWP&CL) in two significant ways. The MWP&CL governs the timing of payment and payment of wages (such as salary, bonus or commissions) upon the termination of employment.

First, the General Assembly added “overtime wages” to the definition of “wage.” Accordingly, if a court now finds that an employer withheld overtime wages, other than as a result of a bona fide dispute, the employee may be entitled to treble damages. This represents a change from existing court precedent, which provided that an employee could sue for overtime wages only under the Fair Labor Standards Act and the Maryland Wage and Hour Law, but not under the MWP&CL. Notably, the new law fails to provide any guidance to courts about how the conflicting penalty sections of these statutes should be reconciled.

Second, the General Assembly provided the Maryland Department of Labor, Licensing, and Regulation (“DLLR”) with the authority to investigate and adjudicate wage claims of up to $3,000. Upon receipt of a complaint from an employee, DLLR will send a copy to the employer and require a written response within 15 days. Following an investigation, DLLR may issue an order to pay the wages plus interest or dismiss the claim. Significantly, DLLR is not authorized to order attorney’s fees or treble damages, which would otherwise be available to an employee in court.

Within 30 days after receipt of an order to pay wages, an employer may request a de novo administrative hearing. If an employer is unsuccessful at an administrative hearing, it may appeal the decision to a circuit court. However, the court may overturn the administrative decision only if it “is unsupported by competent, material, and substantial evidence in light of the entire record as submitted; or is arbitrary or capricious.”

These changes become effective on October 1, 2010.

This entry was written by Steven Kaplan.