During the 2024 Maryland legislative session, 2,728 bills were introduced, four were vetoed, and 1,049 were signed by Governor Wes Moore.
Below, our attorneys share their insight into a selection of new laws that may impact you, your business, or your community. This update is not intended to be exhaustive, and provides a brief synopsis of significant legislation that you may want to aware of. To discuss the implications of these laws and for strategic analysis specific to your business, please contact the Davis, Agnor, Rapaport & Skalny attorney with whom you typically work, or connect with us here.
Labor & Employment
Family and Medical Leave Insurance Program (FAMLI)
FAMLI allows eligible employees to receive up to 12 weeks of certain paid family and medical benefits (24 weeks in certain circumstance(s)) from the State. Modifications passed this session (SB485/HB571) clarify and amend the Time to Care Act in numerous ways, the most significant of which include delaying implementation for one year (contributions will now begin on July 1, 2025 and benefits will become available on July 1, 2026), defining “covered employees”, and establishing criteria for a private plan.
“Covered employee” is defined as an employee who has worked at least 680 hours performing services under employment located in the state over the four most recently completed calendar quarters immediately preceding the date on which leave is to begin. All employers must comply with the Act, including out of state employers who employ only one individual in Maryland.
Employers that decide not to participate in the state program must either offer benefits through a state-approved program or an authorized insurance plan. Employers may submit a private plan to the Department of Labor for approval. The Secretary of Labor will establish criteria for determining which employers are authorized to meet the requirements of a private plan.
Wage Range Transparency
Under new law (SB525/HB649), employers are required to disclose, in good faith, the wage range (minimum and maximum wage or salary), general description of benefits, and other compensation offered for all internal and external posted positions. Employers are also required to maintain records for three years. The Department of Labor may impose monetary penalties for noncompliance.
Effective date: October 1, 2024
Payroll Statements
Effective date: October 1, 2024
New legislation (SB38/HB385) requires all employers to provide employees, at the time of hiring, with a written notice of rate of pay, regular paydays and leave benefits. At each pay period, employers must provide a written statement on the pay stub or online statement including the employer’s registered name and address, date of payment and pay period, hours worked and rate of pay, additional bases of pay, and deductions. An administrative penalty up to $500 per employee may be assessed for noncompliance.
Noncompetes
Following significant federal updates to noncompetes announced in April (read our update here), additional clauses and requirements were passed this session (HB1388).
Effective June 1, 2024, noncompetes for licensed veterinary practitioners and veterinary technicians are prohibited. This bill limits the maximum allowable time and geographic scope of noncompetes for providers who earn more than $350,000 annually.
Effective June 1, 2025, noncompetes for licensed health care providers will be prohibited. This includes physicians, physician assistants, nurse practitioners, nurses, dentists, pharmacists, psychologists and optometrists who are employed in a position that provides direct patient care and earn $350,000 or less annually.
This legislation also requires health care practices to provide notice to the provider’s patients, if asked by the patient, as to the new location where the provider will be practicing.
For more information about labor and employment legislation that may impact your business, please contact an attorney in our Labor & Employment Practice Group.
Business Planning & Transactions
Privacy
The Maryland Online Data Privacy Act of 2024 (MODPA) (SB541/HB567) establishes regulations for businesses that collect, process, or sell personal data of consumers. This statewide data privacy law applies to entities that conduct business in Maryland or target Maryland residents with their products or services, and that either control or process the personal data of at least 35,000 consumers, or control or process the personal data of at least 10,000 consumers and draw more than 20% of their gross revenue from the sale of personal data. Generally, these thresholds are lower that most other state privacy laws (Maryland is the 17th state to pass a comprehensive data privacy bill since California passed its Consumer Privacy Act six years ago).
There are some exceptions to the MODPA; notably, certain governmental entities and types of data including data subject to HIPAA and data used for certain research and public health purposes do not apply. In addition, individuals in commercial or employment contexts are not subject to the MODPA. Maryland is one of a minority of states that does not include an exemption for nonprofit organizations, or an entity-level exemption for higher education institutions or organizations covered by HIPAA. However, the MODPA does allow an exemption for nonprofit organizations that process or share personal data to assist law enforcement or first responders.
While the MODPA takes effect on October 1, 2025, it does not have any effect on or application to personal data processing activities before April 1, 2026. Given the nuances of this law, businesses should begin preparing now to avoid non-compliance.
Transparency
To improve predictability for businesses and streamline state processes, the Transparent Government Act of 2024 (SB472/HB581) requires state agencies to create a catalog of every type of permit and license that they issue, including what the permit does and how long it takes to complete or process applications. Agencies must also provide recommendations for and analyses of how long it should be taking to complete or process applications. In addition, this information must be posted on state agencies’ websites. Increasing the transparency of these processes should allow businesses to efficiently plan for growth and avoid unexpected lengthy timelines.
Effective date: July 1, 2024
For more information about legislation that may impact your business, please contact an attorney in our Business Planning & Transactions Practice Group.
Construction
Procurement & Contract Modification
New legislation (SB556) specifically amends existing code section 3-609 of the State Finance & Procurement Article, and is a response to the issues caused by price escalations in materials following COVID-19 and other supply chain catastrophes that have plagued the construction industry over the last five years.
The current Construction Contingency Fund for State of Maryland contracts must now allow for contractors on State projects to recover for “extreme fluctuations in price to eligible project-specific materials” (this is mandatory). The maximum price change available to the contractor is capped at 10%, and is only available under specific circumstances and with specific conditions being met (including the type of material in question). However, delays due to actions by the State or unforeseen events, including epidemics or pandemics, which produce price escalation in materials now will allow recovery by the contractor from the State for those increases. This law will go into effect on October 1, 2024, and will apply to construction contracts entered after that date.
For more information about construction-related legislation that may impact your business, please contact an attorney in our Commercial Litigation Practice Group.
Community Associations
Infrastructure Repair
Counties and municipalities in Maryland may now establish a fund to provide financial support for infrastructure repair or rehabilitation of certain community components such as roads and stormwater management systems. Under this bill (HB446/SB280), a county or a municipality may also establish eligibility requirements for awarding funds.
Effective date: October 1, 2024
Electric Vehicle Charging Equipment
This new legislation (HB159/SB465) modifies the state’s current electric vehicle charging station law to include certain requirements for electric bicycles and other motorized electric vehicles. The law also establishes owner’s insurance requirements. Under the law, charging station applications must be handled in the same manner as a community’s architectural modifications (generally a 60-day time limit for a board or architectural committee render a decision).
Effective date: October 1, 2024
Asbestos Disclosure
In addition to long-standing disclosure requirements, under this law (HB143/SB46), a condominium seller must now also declare whether there is knowledge of asbestos in the unit and whether abatement actions have been performed during the occupancy of the owner.
Effective date: October 1, 2024
For more information about community association-related legislation that may impact you or your business, please contact an attorney in our Community Associations Practice Group.
Health Care Law
Medical Records
This legislation (HB149) extends the time period during which a health care provider is prohibited from destroying medical records and laboratory and X-ray reports from five to ten years. In addition, notice regarding the destruction of medical records is required to be provided to the last known e-mail address of the patient or the parent or guardian of a minor. Health care providers are also required to make medical records available for retrieval by the patient or the parent or guardian of a minor.
Effective date: October 1, 2024
For more information about health care-related legislation that may impact you or your business, please contact an attorney in our Health Care Practice Group.
What’s Next
The 2025 legislative session is expected to largely resemble the 2024 session. Governor Moore will begin his third year in office and no seats in the General Assembly will be up for election until 2026. Issues to consider following this fall and next year include those listed below. We will continue to monitor legislation that significantly impacts our clients, partners, and friends of the firm, and will keep you informed of relevant updates.
- FTC noncompete ban: Our team continues to track the current status of the FTC noncompete ban set to go into effect on September 4, 2024. A follow up communication will be sent to our clients as we continue to monitor the ongoing court cases reviewing the merits of the FTC’s rule.
- Overtime salary thresholds: The U.S. Department of Labor recently issued new salary thresholds for exempt employees that went into effect on July 1, 2024. Multiple challenges are currently moving through the courts. Our team continues to track the status of these cases and will update our clients if there are any new developments.
- Cannabis: We expect to see proposed legislation in the 2025 Maryland General Assembly session that provides for protections for cannabis use in the workplace.
- Maryland FAMLI: As final regulations are being released, we anticipate legislation further addressing clarifications of the law as contributions are set to begin on July 1, 2025.
For more information about legislation that may impact you or your business, including how to advocate for your business’ interests, please contact an attorney in our Government Relations Practice Group.
