Maryland has enacted legislation (House Bill 1154) that amends and clarifies requirements for notifying the state and workers before reductions in operations. House Bill 1154 takes effect on October 1, 2021.
Background:
Maryland's Economic Stabilization Act (ESA), also known as Mini-WARN, requires employers that have at least 50 employees to provide at least 60 days written notice before initiating a reduction in operations. Under the law, a reduction in operations includes:
- The relocation of a part of an employer's operation from one workplace to another existing or proposed site; or
- The shutting down of a workplace or a portion of the operations of a workplace that reduces the number of employees by at least 25 percent or 15 employees, whichever is greater, over any three–month period. For this determination, only employees working 20 or more hours per week on average or for six months or more in the immediately preceding 12 months are considered.
Currently, the notice must be provided to:
- All employees at the workplace that are subject to the reduction in operations;
- Collective bargaining representatives;
- All elected officials in the jurisdiction where the reduction is occurring; and
- The dislocated worker unit within the Maryland Department of Labor.
House Bill 1154:
Relocation:
House Bill 1154 amends the ESA to add that the relocation provision applies when the relocation may reduce the total number of employees at the initial worksite by at least 25 percent or 15 employees, whichever is greater.
Elected Official Notification:
House Bill 1154 limits the scope of elected official notification from all elected officials in the jurisdiction to only the chief elected official of the political subdivision where the workplace is located. If a workplace is located in more than one political subdivision, only the chief elected official of the subdivision to which the employer paid the most taxes for the prior fiscal year must receive notification.
Exceptions:
House Bill 1154 establishes two exceptions to the requirement that an employer provide written notice of a reduction in operations at least 60 days before initiating the reduction. These includes situations in which:
- The employer was actively seeking capital or additional business to prevent the layoffs and believed that providing notice would preclude the employer from obtaining necessary capital or business; or
- The reduction in operations occurs due to any form of natural disaster.
If one of the above situations precludes written notice on normal deadlines, the employer must provide notice as soon as practical with a brief statement of the basis for not providing at least 60 days written notice.
Sale/Purchase of a Business:
House Bill 1154 clarifies that in an instance when purchase or sale causes a reduction in operations, notice must be provided both by the seller on or before the effective date of sale and by the purchaser after the effective date of sale.
Compliance Recommendations:
Maryland employers should review their procedures to ensure compliance with House Bill 1154 beginning October 1, 2021. Please contact your dedicated service professional with any questions.