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Overview of Claims for Wages in Maryland (Including Commissions, Leave, Overtime and Waiting Time)

Posted by attorney Julie Janofsky

Claims for Wages, Including Commissions, Leave Time, Overtime and Waiting Time

What are Wages?

A wage is any payment or compensation for work performed. Wages may include a bonus promised for work completed, a commission promised as compensation for making a sale, a fringe benefit such as paid leave or health insurance, overtime pay, or any other form of compensation for work performed.

Deductions from Wages and Wage Payment at Termination

In Maryland, an employer is required to pay an employee all wages due for work that the employee performed before the termination of employment, on or before the day on which the employee would have been paid the wages if the employment had not been terminated.

Maryland employers are not permitted to make deductions from wages unless: 1) a court has ordered the employer to make the deduction(such as in the case of a wage garnishment to pay creditors and orders to pay child support); 2) the Commissioner of the Maryland Division of Labor and Industry has allowed the deduction; 3) the deduction is allowed by a law or regulation (such as the laws requiring withholding for state and federal taxes); or 4) the employee has authorized the deduction in writing.

Even with a proper authorization, however, employers must still pay at least the minimum wage in the case of a deduction made to offset a loss to the employer (such as, for example, to reimburse the employer for careless damage to a company vehicle or parking tickets incurred by the employee while using a company vehicle). If the deduction is made to offset something that the employee received or retained from the employer that had monetary value (such as, for example, a personal loan or a wage advance), then the deduction may reduce the employee's wages below the minimum wage.

Employers who withhold wages, make improper deductions from wages, or who fail to pay an employee for all wages due for work that the employee performed before the termination of employment, may be sued. Such actions can be quite costly in Maryland. In some cases, if there was no good faith dispute, the employer may be liable for up to triple damages plus the employee's reasonable attorneys' fees and litigation costs.

Unpaid Commissions

As with other forms of wages, under Maryland law, commissions due for work that the employee performed before the termination of employment must be paid on or before the day on which the employee would have been paid the commissions if the employment had not been terminated. Unconditional agreements to forfeit commissions upon termination of employment are unenforceable if the employee performed all services necessary to claim the commissions before the termination. Disputes over commissions often focus on the issues of when the commissions were due, what formula was used to compute the commissions, and whether the employee performed all services required to claim the commissions before the termination occurred. Employers who utilize commission arrangements can avoid such disputes by setting out in writing all of the requirements that must be fulfilled before the employee may claim a commission, the formula on which the commission will be based, the regular dates on which commissions will be paid, and the manner in which commissions will be settled with the employee upon termination. If the employer does not do so, employees entering into commission arrangements can protect themselves by memorializing their own understanding of the commission terms in writing.

Pay for Meals, Breaks, Vacations and Sick Leave

There is no law requiring an employer to provide adult employees with breaks (either paid or unpaid), including meal breaks. An employer who chooses to provide a meal break does not have to pay wages for that, as long as the employees are completely relieved of all work responsibilities during the break, and do not actually perform work. If employees are expected either to work or to be on hand to do work, should it be needed during their break, they must be paid for the time.

There is no law requiring an employer to provide any paid vacation, sick pay or other paid leave time. Unused vacation may or may not be paid at termination under Maryland law, depending on the employer's written policy. If a Maryland employer informs employees in writing at the time of hiring that accrued but unused vacation will be lost or forfeited upon termination, then the employee may not have a claim for that. On the other hand, if the employer does not have any written policy that limits compensation for accrued but unused vacation, the employee may be entitled to be paid for it upon termination. Generally, accrued but unused sick time is forfeited at termination.

Pay for Flexible Medical Leave and Family and Medical Leave

The Maryland Flexible Leave Act applies to employers who employ 15 or more employees, and who choose to provide any form of paid time off for employees. Such employers must allow employees to use any paid leave time available to them, including any paid sick leave and vacation, whenever a child, parent or spouse is ill. The law does not require employers to provide paid leave time, nor does it require employers to advance any paid leave time not yet earned.

Under the federal Family and Medical Leave Act (FMLA), employers who employ 50 or more employees for a qualifying length of time are required to provide eligible employees up to 12 workweeks of leave for certain family and medical reasons. FMLA leave may be taken for the birth or adoption of a child of the employee, for the employee's own serious health condition, for the serious health condition of a family member, and for situations relating to the employee's family member being deployed or injured in the military service. The time is extended to up to 26 workweeks of leave for eligible employees who require time off to care for a family member with a serious injury or illness incurred as a result of military service.

To be eligible for FMLA leave, the employee must have worked for at least one year, and must have worked at least 1,250 hours during the one year before the FMLA leave begins. The employer can require the employee to use any accrued paid leave first, but beyond that, FMLA leave is generally unpaid.

Overtime Pay

The law requires that most employees be paid overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. Employers who fail to pay overtime properly may be liable under federal law for up to double the unpaid wages, plus the employee’s attorneys’ fees and costs of litigation.

There are exemptions from overtime pay for certain employees. The most common exemptions are for those employed as executive, administrative, professional and outside sales employees, although there are many other exemptions as well, covering employees such as seasonal recreational and amusement workers, computer professionals, and certain live-in domestic workers. To qualify as exempt, employees generally must meet certain tests regarding their job duties, and they must be paid on a salary basis at not less than a statutory minimum amount per week.

Job titles do not determine exempt status. Similarly, converting an employee who is not exempt into a "salaried" employee does not relieve the employer of the obligation to pay for overtime, if the employee does not in fact meet the tests for an exemption.

Pay for Waiting, "On-Call" and Travel Time

Some employers require employees to be available “on call," or to wait for work. Determining whether non-productive time spent on-call or waiting is compensable work time is very fact-specific. It involves considerations such as the following: how long the employee has to respond; the degree of freedom that the employee enjoys to engage in personal activities while waiting; whether the employee is required to remain on-site; and the frequency or duration of work that the employee is required to perform while responding to calls. A truck driver who is required to wait on the employer’s premises while the truck is loaded with goods that the driver must drive to the customer cannot use the time effectively for her own purposes. The driver is working, and should be paid for the time. On the other hand, an employee who is not required to remain on the employer’s premises, but is merely required to leave word with company officials where she may be reached in the unlikely event of an emergency, is not working.

Whether time spent in travel is compensable working time depends upon the kind of travel involved. Generally, time spent commuting from and to the employee’s home at the start and end of the workday is not compensable. On the other hand, time required by the employer for the employee to travel from job-site to job-site during the work day, or for the employee to travel to a special out-of-town assignment, is compensable.

The parties can agree to compensate non-productive hours, such as travel, on-call and waiting time, at a rate (at least the minimum wage) that is lower than the hourly rate applicable to productive work time. In such a case, the employee’s overtime rate will be a weighted average of the two rates, and it may vary from week to week.

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