BIG WIN FOR MARYLAND WORKERS: Wages Required for Employer-Required Activities Before or After Work

In Amaya et al. v. DGS Construction LLC et al., Maryland’s highest court has held that Maryland workers are entitled to get paid for some employer-required tasks performed before and/or after work. For example, in Amaya, the Maryland-based workers were required to park at an off-site location, take an employer-provided bus to the actual worksite, and then wait in a security line to be checked in for work.

Maryland’s highest court found in favor of workers, who said they should be paid for the time the process took. The Court has ruled that Maryland labor laws, specifically the Maryland Wage and Hour Law and Maryland Wage Payment and Collection Law, do not include an exception for before- and after-work required tasks that exists in federal law under the Portal-to-Portal amendment to the Fair Labor Standards Act, the federal law that governs minimum wages and overtime wages. 

The Portal-to-Portal act provides that employers do not have to pay employees for time spent performing certain activities that are considered preliminary and postliminary to the employees’ “principal” or main job duties that they are employed to perform. Such activities can include but are not limited to traveling to and from work, waiting in parking areas, waiting in security lines, and putting on and taking off equipment such as safety gear. But now, according to Maryland’s highest court, Maryland State law does have that exception.

This is a huge win for Maryland employees because it means you may be entitled to additional wages for tasks your employer requires you to perform at the beginning and end of your work day.

If you think you may be owed additional wages for work you are required to perform before your work day begins or ends, the attorneys at Lebau & Neuworth may be able to help. For a consultation, contact us at (410) 296-3030 or lebauneuworth.com/contact-us.

Minimum Wage Increase for Montgomery County Workers

We regularly blog about minimum wage requirements for workers in Maryland and the District of Columbia. And we recently settled a case in which a restaurant in Rockville, Maryland, failed to pay the Montgomery County minimum wage to a group of workers.

Below are the minimum-wage increases that took effect in Montgomery County on July 1st of this year and will take effect again next year:

Effective DateLarge Employer
51 or more workers		Mid-Sized Employer
11 to 50 workers		Small Employer
10 or few workers
July 1, 2022$15.65$14.50$14.00
July 1, 2023Increased annually, 
CPI-W		 $15.00$14.50

Know your rights when it comes to what you should be paid! To protect those rights and your minimum wage, contact Lebau & Neuworth at (410) 296-3030 or lebauneuworth.com/contact-us.

Severance Pay as Owed Wages Under Maryland Law: Get Three Times the Amount

Another Maryland court has ruled that severance pay required by an employment contract can be considered owed “wages” under the Maryland Wage Payment & Collection Law and just not an item that has to be provided by contract terms. This is important because if the severance pay is considered an owing wage, the employee can require up to three times the amount of wages. If just a contract item, the employee cannot recover three times the amount owed and cannot get attorney fees paid by the employer if the employee wins in court.

In Playmark Inc. v. Perrett, the Maryland Court of Special Appeals ruled that the severance pay required to be paid out was an owing wage and just not a contract item. In pertinent part, the Court stated:

"[T]he scope of [the Wage Act] extends to the type of severance pay that represents deferred compensation for work performed during the employment. Thus, a severance benefit that is based on the length [or] nature of the employee’s service, and promised upon termination, may be recoverable under the [Wage Act]."

The Court rejected the employer’s argument that the severance pay was not an owing wage because it was not paid for work done. The employer claimed that the severance pay was a result of a noncompete provision being in the contract. The Court disagreed, stating “the mere inclusion of a covenant not to compete does not automatically remove post-employment payments from the realm of “wages” and the scope of the Wage Act if those benefits are (1) promised in exchange for employment, and (2) not expressly conditioned on continuing compliance with the covenant not to compete post-employment. The Court noted that noting in the contract conditioned severance pay on the employee’s compliance with the noncompete contact.

If you need assistance with possible severance pay, contact the attorneys at Lebau & Neuworth at 1.888.456.2529 or lebauneuworth.com/contact-us.

Federal Wage-Hour Law Expanded to Include Overtime ‘Gap’ Claims

Recently in Connor v. Cleveland County North Carolina, the federal Fourth Circuit Court of Appeals, of which Maryland is part, held that the Fair Labor Standards Act (FLSA) allows claims for unpaid straight-time wages in weeks when an employee works overtime hours.

Typically, the FLSA only requires that an employee be paid the required minimum wage, currently $12.50 in Maryland for employers with 15 or more employees (Montgomery County has a separate minimum wage based on employer size), and overtime for all hours worked at a rate of one-and-one-half times the employee’s regular rate of pay.

An overtime gap claim exists when an employer pays an employee more than the minimum wage but less than his/her guaranteed hourly rate during a week when the employee worked overtime hours and is owed overtime pay. For example, if an employee has a fixed hourly rate of $15 per hour but is only paid $13 per hour and during that week the employee worked over 40 hours in the workweek and is entitled to overtime wages, there is a possible $2-per-hour overtime gap claim.

Prior to the Connor decision, an employee had no claim for the difference for what was supposed to be paid as the guaranteed hourly rate and what was actually paid during weeks when they worked overtime hours. The Connor case makes clear that when an employee and employer have an expressed agreement for a set hourly rate, the employee is entitled to be paid all of his/her guaranteed regular straight-time rate before overtime wages are calculated. The Court relied on the plain language of the FLSA and relevant federal overtime regulation to make its decision.

In Connor, the agreement between the employer and the employee was a collective bargaining agreement. It is an open question as to what is needed for an employee to prove that there was an agreement that bound an employer and could not be changed.

Importantly, even if an employee does not have a viable overtime gap claim, the employee may still have a claim under the Maryland Wage Payment and Collection Law, the Virginia Wage Payment Act, and the District of Columbia law. This is because these laws require that employers timely and correctly pay their employees.

Although the decision in Connor allows for “overtime gap time claims,” “pure gap time claims” are still not allowed under the FLSA. “Pure gap time claims” are for unpaid wages when an employer pays an employee more than the minimum wage but less than his/her guaranteed hourly rate during a week when the employee did not work overtime hours of more than 40 hours in a workweek.

If you think your employer has not paid you all that you are owed (overtime, commissions, bonuses, etc.), contact the lawyers at Lebau & Neuworth at (410) 296-3030 or lebauneuworth.com/contact-us.

Important to Properly Determine Who is an “Employer” Under Maryland Wage Payment Laws

If you are owed wages and want to sue your employer, you need to make sure your lawyers sue all the parties who can be liable as an “employer,” including individuals. A case can be dismissed if the wrong “employer” is sued.

Determining who is an “employer” is not always easy. An example is the recent case of Qun Lin v. Cruz, 2020 Md. App. LEXIS 943 (App. Sep. 30, 2020) in which a Rockville, Maryland restaurant, Teppanyaki Grill & Supreme Buffet, had one individual’s name (Mr. Chen) in its articles of incorporation but another individual (Mr. Lin) signed the lease for the restaurant. Teppanyaki Grill, as a business, failed to answer the Complaint, and both Mr. Chen and Mr. Lin denied ownership. Mr. Lin claimed in court that he did not have any interest in the restaurant and only signed the lease as a favor for Mr. Chen. The court found that Mr. Lin was the owner and held him personally liable for the restaurant employees’ unpaid wages.

On Mr. Lin's appeal, the Maryland Court of Special Appeals set out the correct law under a heading “Who is an Employer?” The court stated that Maryland law does not insulate individuals from being an “employer” even if they are a member of a limited liability company. The court noted Maryland and federal courts apply the economic “reality test” to determine whether an individual qualifies as an employer under wage-hour laws.

The economic reality test uses four factors to determine an individual’s level of "control" over an employee: Did the alleged employer (1) have the power to hire and fire the employees; (2) supervise and controll employee work schedules or conditions of employment, (3) determine the rate and method of payment; and (4) maintain employment records. 

The court stressed that the person who is the sole proprietor/owner of a business does not automatically make the person a “employer” under Maryland Wage Payment Law. Instead, the owner must be found liable under the economic reality test, regardless of the form of the business. 

If you are seeking advice, assistance and representation for owed wages against your employer, it is very important for you to choose the right lawyer who can correctly determine who your employer actually is. The attorneys at Lebau & Neuworth are experienced in handling all type of owed wages cases under the federal and state laws, so please contact us at (410) 296-3030 or lebauneuworth.com/contact-us.

CORONAVIRUS PANDEMIC: When Working From Home, Employers Must Reimburse For Expenses

Many workers now have the option of working from home or have been told that they have to work from home because of the Coronavirus pandemic.

If you are working from home in Maryland, your employer is required to reimburse you for expenses you incur directly in connection with your job. This can include mileage reimbursement, telephone and internet usage, as these fall within the definition of a "wage," according to the complaint form from the Maryland Department of Labor.

In addition, under the federal Fair Labor Standards Act (FLSA), no employer can require an employee to pay for the employer’s business expenses if doing so would reduce the employee’s earnings below the required minimum wage. The FLSA therefore requires all employers to reimburse their employees for any business expenses incurred that would bring their pay below the minimum wage.

Employees must be on alert to safeguard their job protections at this difficult time. We at Lebau & Neuworth are available to listen to you and see if we can protect your job rights, including those under all laws pertaining to the Coronavirus pandemic. For more information, contact us (410) 296-3030 or lebauneuworth.com/contact-us.