A contractor’s willful violation of Maryland wage and hour laws can now lead to debarment. Under Senate Bill 669 (Chapter 189 of the 2014 Laws of Maryland), signed by the Governor on April 14, 2014, a person may be debarred from entering into a contract with the State of Maryland if a court or administrative tribunal finds that the person committed a willful or knowing violation of Maryland wage and hour law. The term “person” is broadly defined to include an officer, partner, controlling stockholder or principal of the contractor, or any other person substantially involved in the person’s contracting activities.

The law applies to willful or knowing violations of the following laws: Wages and Hours, Title 3, Subtitle 4 of Labor and Employment Article (includes overtime and minimum wage protections); Wage Payment and Collection, Title 3, Subtitle 5 of Labor and Employment Article (sets time requirements for the payment of wages); Equal Pay for Equal Work, Title 3, Subtitle 3 of Labor and Employment Article (prohibits gender discrimination in pay); Living Wage, Title 18 of State Finance and Procurement Article (sets a living wage rate for certain services contracts); and Prevailing Wage, Title 17, Subtitle 2 of State Finance and Procurement Article (establishes wage scales for certain public works contracts). The new debarment provisions go into effect October 1, 2014.

It is important that contractors understand their obligations under applicable wage and hour laws. A violation can subject a contractor to liability for back pay, liquidated damages, treble damages, and/or attorney’s fees. As a result of Chapter 189, debarment is now an added potential consequence.

If you have any questions about compliance with the Maryland’s wage and hour laws, or believe that one of your competitors or your employer is not paying the proper wage, we encourage you to contact our office.