2018 Legislative Update

2018 Legislative Update

The Maryland General Assembly opened its 2018 session on January 10, 2018.  Before it concluded on April 9th, a total of 889 bills had passed: 403 in the Senate and 486 in the House. As is always the case, some bills were more significant than others, and some certainly became the subject of heated political debates. In the end, there were some “wins” in the form of new legislation, but the majority came in the form of not what did pass, but what did not.  To follow is a summary of some of the highlights. 

LABOR AND EMPLOYMENT

Maryland Healthy Working Families Act (HB 1 – Veto Override)

This bill mandates that employers provide 40 hours of sick and safe leave to all full time, part time, temporary and seasonal employees who are 18 years of age and regularly work 12 or more hours /week.  Employers with 15 or more employee will offer paid leave and employers with less than 15 employees will offer unpaid leave. Number of Employees equals the average monthly number of all FT, PT, temporary and seasonal.  Employees will receive 1 hour of leave for every 30 hours worked.

Minimum Wage Update

While the minimum wage rate for Maryland will increase to $10.10 on July 1, 2018, that is not the case throughout the State. Montgomery County passed its own minimum wage requirements, which are both higher than the State’s minimum wage and are based on the size of the employer. Below is a chart which summarizes the new minimum wage requirements.

DateLarge Employer (51  or More)Mid-Size Employer (between 11-50)Small Employer (10 or Fewer)
July 1, 2018$12.25$12.00$12.00
July 1, 2018$13.00$12.50$12.50
July 1, 2020$14.00$13.25$13.00
July 1, 2021$15.00$14.00$13.50
July 1, 2022$15.00*$14.50$14.00
July 1, 2023$15.00*$15.00$14.50
July 1, 2024$15.00*$15.00*$15.00

*     Subject to additional CPI increases. Click here to view details of the enacted bill.

Sexual Harassment (HB1596/SB1010)

This bill provides that a provision in employment contracts, policies, or agreements that waive certain rights or remedies to a claim of sexual harassment or certain retaliation is null and void as being against the public policy of the State.   Employers are prohibited from taking certain adverse actions against certain employees; providing that certain employers are liable for certain attorney's fees; applying the Act; etc.

Employers will not be allowed to require an employee to waive any right or remedy (such as litigation) to a future sexual harassment claim, either through an employment agreement or employee manual, unless it is superseded by federal law. 

In addition, every two years, the Maryland Commission on Civil Rights will survey employers with 50 or more employees to learn three things:

  1. How many times the employer settled a sexual harassment allegation.
  2. How many settlements included a confidentiality agreement.
  3. How many times an employer has paid a settlement to resolve a sexual harassment allegation against the same employee in the previous 10 years.

Business and Real Estate

Employee-less Food Stands Now Require a Permit (HB1087/SB0758)

Maryland now requires a seller who operates an unstaffed, retail food service stand where the customer purchases prepackaged food from a machine cashier, or a “micro market," to obtain a license.  The $50 license will be imposed on these unstaffed food stands in much the same way as the license currently applies to vending machines.  The seller must post certain signage and retain video surveillance for at least 14 days.  The new law also details packaging requirements for foods that may be sold at a micro market.

General Contractor Liability for Unpaid Wages (HB1539/SB0853)

This bill provides that general contractors in the construction services industry are jointly and severally liable for certain violations of the wage payment and collection law by a subcontractor, regardless of whether the subcontractor is in a direct contractual relationship with the general contractor.  The bill requires a subcontractor to indemnify a general contractor for certain wages, damages, interest, penalties, or fees except under certain circumstances.

The bill allows the subcontractor two weeks to pay the employee wages and benefits which are due. After two weeks, the employee has the right to bring an action against the general contractor. Finally, the bill allows the court to award the employee up to three times the amount due him/her, along with reasonable attorney fees and other costs.

The intent of this bill is to hold general contractors liable for subcontractors who exploit workers.  The bill ensures that construction workers will be able to collect unpaid wages and benefits.

Medical Cannabis Licenses May Be Granted to Minority Applicants (HB2/SB1, HB1035/SB1063)

The Maryland General Assembly passed new laws to encourage minority business owners’ participation in Maryland’s increasing medical cannabis industry. The bill requires that a certain number of new licenses be issued for cannabis growers and processors.  In addition, the State has created a “compassionate use” special fund that will provide free or discounted medical cannabis to veterans or those on Medicaid.  The law has also relaxed prior restrictions against those with felony drug convictions from becoming medical marijuana growers, dispensers, or processors.  Additionally, Maryland law now prohibits referrals from certifying providers that may result in a form of kickback.  Those parties with referral agreements will need to be extremely cautious to verify that any form of agreement does not violate the referral prohibition.

Maryland Paves Way for Growth of Agritourism (HB252, HB1141 , HB1351, HB1116)

The Governor requested, and the General Assembly has passed, legislation that will greatly expand farmers’ ability to engage in “agritourism,” or business that takes place on a farmer’s land.  The law is meant to encourage business like vineyard/winery tours, hayrides and corn mazes, and other similar activity.  Corresponding legislation was passed to remove burdens to agritourism business, such as restrictions in reservation easements and the need for a building permit. Under this law, many existing farm structures will not need a building permit, nor will they be required to meet current building code requirements when using certain structures for agritourism business.

Liquidated Damages Must Be Limited Against Minority Business Enterprises (HB858/SB251)

Starting October 1, 2018, Maryland law will prohibit a State agency from assessing automatic payment for an alleged breach of contract, known as liquidated damages, against certain contracts involving a Minority Business Enterprise (“MBE”) contractors.  Specifically, no MBE-involved may include a liquidated damages provision unless it also has defined performance dates.  This restriction applies to both the delivery of goods and the performance of services.   This provision will protect MBEs by reducing the scope of liability and/or clarifying the terms of performance under the contract.

Estates, Trusts, and Guardianship

Maryland Estate Tax (SB646)

Many people are aware that Maryland’s Estate Tax exemption was scheduled to increase over several years, and match the Federal Estate Tax exemption as of 2019.  However, the Tax Cuts and Jobs Act that passed last year changed the Federal Estate Tax so that it now applies only to taxable estates in excess of $11.18 million, up from the $5.6 million that was protected under the prior law.  Instead of matching this substantially increased exemption amount, Maryland chose to establish an individual estate tax exemption of $5 million (potentially $10 million for a married couple) as of 2019, with no automatic cost of living increases for future years. 

Contesting the Validity of Trusts (SB348)

With Wills, upon the death of the deceased, the validity of that deceased person’s Will may be contested by filing a caveat in the Orphans’ Court within six months of the opening of the estate, absent special circumstances.  Under a new law, the validity of revocable trusts may be contested if a person initiates a legal proceeding within one year of the death of the deceased, or, alternatively, within six months of being provided proper notice about the trust agreement.

Petition for Visitation (HB1483)

Across the country, there have been many cases where a person with a disability is isolated from family members by his or her guardian.  Under a new law, Maryland now allows certain persons, such as a spouse, adult children and grandchildren, and parents or siblings of the person to petition a court to require the guardian to allow visitation by these family members under such terms and conditions as the court determines to be appropriate.

Voluntary Admission to Mental Facility (HB33)

Under prior law, a person who was deemed by a Court as being unable to make or communicate informed decisions concerning his person, would be unable to self-admit to a facility for treatment of a mental disorder.  Now, such a person may self-admit to a facility for mental health treatment, as long as the mental disorder susceptible to treatment or care, and provided that the person (i) understands the request for admission; (ii) is able to give continuous assent to retention by the mental facility; and (iii) is able to ask for release.

Maryland ABLE Program (SB550)  

It will now be possible to transfer funds from qualified tuitions plans (such as a 529 Plan or the Maryland Prepaid College Trust), to an ABLE Account (“Achieving a Better Life Experience”) for the benefit of a beneficiary with a disability, although the transfer is subject to certain maximum limitations established under federal law.   This gives flexibility to parents or grandparents who want to establish tax-advantaged accounts for a young beneficiary with a disability, even if it is still uncertain whether the young beneficiary will be able to attend college in the future.

Court-Appointed Guardians

On January 1, 2018, changes to Maryland court rules went into effect that apply to guardianship proceedings, court-appointed guardians and attorneys. The rule changes were adopted to implement recommendations issued by the Guardianship Work Group in May 2016 aimed at improving court processes and ensuring that best practices are employed by state courts in the management of guardianships of minors and vulnerable adults.

Community Associations

Condominiums – Suspension of Use of Common Elements (HB575)

In the case of Elvaton Towne Condominium Regime II, Inc. v. Rose, the Maryland Court of Appeals held that a unit owner’s right to use the common elements was an interest in real property and, therefore, a condominium’s ability to suspend a delinquent unit owner’s right to use the common elements must be expressed in the condominium’s declaration.  In response to this opinion, the Maryland General Assembly enacted a law permitting condominiums, after notice and the opportunity for the owner to request a hearing, to suspend a unit owner’s right to use parking and the recreational amenities, once the owner is more than 60 days delinquent in the payment of assessments. An amendment to the declaration containing a suspension provision only requires the affirmative vote of 60% of the total eligible voters of the condominium.

Condominiums – Claims Against Developers and Vendors – Unenforceability of Certain Provisions (HB77)

This law restricts a developer from including a provision in a declaration, bylaws or contract for the initial sale of the unit that shortens the time frame that a unit owner or the condominium can bring claims against the developer. 

Real Property – Deletion of Ownership Restrictions Based on Race, Religious Beliefs or National Origin (SB621)

Effective October 1, 2018, homeowner associations are required to delete any covenant or restriction that restricts ownership based on race, religious belief or national origin from common area deeds or other declarations of property.  Such amendments do not require the approval of lot owners.

Real Property – Homeowners Associations – Number of Declarant Votes (HB669)

This law limits the number of votes that the declarant is able to cast on a homeowner association matter to the number of subdivided lots that have not been sold to the public.  This bill will impact both new and existing homeowner associations.

If you have any questions about the specific requirements of any of these new laws, or any other legal or regulatory changes that may take effect later this year, please contact an attorney at our firm so we can assist you.