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Maryland Employment Law
Employer's Toolbox

Understanding Maryland’s Enhanced WARN Act Obligations: What Employers Need to Know

When businesses are forced to make tough decisions about layoffs or plant closures, advance planning is not just smart—it’s required by law. In Maryland, employers must be particularly cautious. The state’s Economic Stabilization Act (ESA) imposes more stringent notice obligations than the federal WARN Act, and failure to comply can lead to significant legal exposure. Who Is Covered? Maryland’s ESA applies to: Employers with 50 or more full-time employees operating in the state Reductions in operations affecting 25 or more full-time employees over a three-month period Relocations, shutdowns, or mass layoffs, even if temporary This lower threshold means that many small and mid-sized businesses—those not subject to federal WARN—must still comply with Maryland’s notice requirements. What Does the ESA Require? Covered employers must provide written notice at least 60 days in advance to: Affected employees Any union representatives The Maryland Department of Labor Local government officials in the area of the affected facility This requirement mirrors the federal WARN Act in terms of timing but covers more employers and situations. Read the Maryland WARN FAQ for more details. Penalties for Noncompliance Failing to give proper notice may result in: Civil penalties of up to $10,000 per day Back pay and benefits owed to affected employees Reputational harm and increased risk of litigation Best Practices for Employers To ensure compliance, Maryland employers should: Evaluate whether any workforce changes trigger the ESA notice obligations Consult legal counsel early in the planning process Coordinate with HR and communications teams to prepare clear and timely notifications Maintain documentation of all notices sent and received How Luchansky Law Can Help Whether you’re restructuring, relocating, or downsizing, Luchansky Law can help you navigate Maryland’s WARN requirements and reduce your legal risk. Our attorneys routinely advise employers on layoff compliance and communication protocols during workforce transitions. Have questions or concerns about a planned layoff or closure? Contact us today to discuss how we can help you stay compliant—and protect your business. Have questions or concerns about a planned layoff or closure? Contact us today to discuss how we can help you stay compliant—and protect your business.  

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Pivotal Digital May 19 No Comments
Employer's Toolbox

Maryland Employers: What the Proposed FAMLI Implementation Delay Means for You

In February 2025, the Maryland Department of Labor (MD Labor) proposed extending the implementation timeline for the state’s Family and Medical Leave Insurance (FAMLI) program. This adjustment aims to provide employers and workers additional time to prepare for the program’s requirements. Key Changes in the Proposed Timeline Under the revised plan: Payroll Deductions: Would commence on January 1, 2027. Benefits Availability: Eligible employees could begin receiving benefits on January 1, 2028. This proposal responds to recent federal actions that have introduced economic uncertainties affecting Maryland’s workforce, including potential reductions in federal employment and impacts on federally funded private sector jobs. Implications for Maryland Business Owners The proposed delay offers several advantages: Extended Preparation Time: Employers gain additional time to understand the program’s requirements and integrate necessary systems. Financial Planning: Businesses can better plan for the financial aspects of payroll deductions and benefit distributions. Employee Communication: Organizations have more time to educate their workforce about the upcoming changes and benefits. Understanding FAMLI Once implemented, FAMLI will: Provide Paid Leave: Eligible employees can receive up to $1,000 per week for up to 12 weeks to care for a family member or address their own serious health condition. Ensure Job Protection: Employees taking leave under FAMLI will have job protection during their absence. Promote Workforce Stability: By supporting employees during critical times, FAMLI aims to enhance overall workforce morale and retention. Next Steps for Employers While the implementation is proposed to be delayed, it’s crucial for employers to: Stay Informed: Monitor updates from MD Labor regarding the FAMLI program. Review Policies: Assess current leave policies to ensure alignment with upcoming FAMLI requirements. Seek Guidance: Consult with legal professionals to navigate the complexities of the new program and ensure compliance. Prepare Now for Maryland’s FAMLI Program Don’t wait for the deadline—start preparing today. Contact Luchansky Law to review your policies, develop a compliance plan, and ensure your business is ready when the Family and Medical Leave Insurance program takes effect.    

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Pivotal Digital Apr 28 No Comments
Employer's Toolbox

Maryland Business Owners: What You Need to Know About the State’s Crackdown on Worker Misclassification

A recent report from Maryland’s Joint Enforcement Task Force on Workplace Fraud (JETF) reveals that more than 5,500 workers were misclassified as independent contractors in 2024. This misclassification not only deprives workers of essential benefits—it also exposes employers to serious financial and legal risk, and creates unfair competition for businesses that play by the rules. Why This Matters to Maryland Employers Misclassifying workers can lead to significant consequences: Financial Penalties: The Maryland Division of Unemployment Insurance uncovered over $36 million in unreported taxable wages in 2024. The Comptroller’s Office alone issued more than $3 million in tax, interest, and penalty assessments. Legal Risks: Employers who misclassify workers may be subject to investigations, citations, back taxes, restitution, and penalties under Maryland’s Workplace Fraud Act. Reputational Harm: Companies caught engaging in workplace fraud risk damage to their brand, employee trust, and client relationships. Industries Under Scrutiny While worker misclassification can happen in any sector, the report identifies the most commonly affected industries: Construction Landscaping Home Health Care Janitorial Services Security Transportation For example, in Maryland’s construction industry alone, an estimated 11% of workers are misclassified, depriving the state of vital unemployment insurance and tax contributions. How Employers Can Stay Compliant Maryland’s enforcement activity is ramping up—now is the time to take a close look at your workforce. Key steps include: Review Worker Classifications: Ensure your independent contractors aren’t actually employees under the law. Understand the Rules: Learn the standards under Maryland’s Workplace Fraud Act and federal law. Get Legal Guidance: When in doubt, consult with counsel—especially for gray areas or unique arrangements. Maintain Documentation: Keep detailed records of work arrangements, job responsibilities, and payment methods. Final Takeaway The growing focus on workplace fraud in Maryland is a reminder that worker classification is not just an HR issue—it’s a legal and financial one. Proper classification protects your business, your workers, and your bottom line. Need help reviewing your workforce classification policies? Contact Luchansky Law to speak with an attorney. References Maryland Department of Labor. “New Report on Workplace Fraud in Maryland Finds Thousands of Misclassified Workers” (February 20, 2025) Joint Enforcement Task Force Annual Report (2024). Download PDF

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Pivotal Digital Apr 23 No Comments

Maryland Noncompete and Conflict of Interest Clause Act

As of October 1, 2019, Maryland joined other states across the nation by enacting the Noncompete and Conflict of Interest Clause Act (NCICA) to prohibit non-compete clauses and conflict of interest clauses for employees who earn equal to or less than $15.00/hour or $31,200 annually.  The State of Maryland has deemed non-compete and conflict of interest clauses for lower paid employees to be against public policy and considers them null and void. Significantly, the NCICA prevents enforcement of non-competition clauses even while such employees are still employed.  The law does not, however, place any limitations on agreements which restrict the use or possession of proprietary client-related materials and information.  The NCICA does not provide any penalty for an employer who compels an employee to enter into a prohibited agreement, nor does it allow employees to sue employers who require them to sign the prohibited agreements. Rather employees will likely rely on the NCICA as a defense to a claim by their employer that they have violated a non-compete provision. If you are a Maryland employer and need assistance with Maryland employment law changes such as NCICA, please contact Luchansky LAW for a consultation.

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Bruce Luchansky Mar 19 No Comments

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