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Out-of-State Businesses with Employees Working in Maryland Can be Held Liable Under Maryland Wage Laws

If your business is outside of Maryland but your employees performed work in Maryland, your company may be subject to liability under the Maryland Wage Payment Collection Law (“MWPCL”) if your company fails to timely pay its employees.  Under the MWPCL, the employer could be exposed to triple damages and attorney’s fees for a violation. The Court of Appeals for Maryland held that unpaid wage claims arising from employment outside the state of Maryland are not excluded, solely for that reason, from being litigated under the MWPCL.  In Cunningham, et al. v. Feinberg, the Honorable Glenn T. Harrell, Jr., writing for the Court, held that unless an employment contract expressly includes a choice of law section, the doctrine calling for a contract to be interpreted under the law of the place where the contract is made is not implicated.  This is because a claim under the MWPCL does not necessarily involve an analysis of the underlying employment contract, and because of Maryland’s strong public policy concerning employee’s wage claims.  In this case, an attorney who was employed by a Virginia law firm but performed legal work in Maryland, sued his employer in Maryland for improperly withholding wages under the MWPCL.  If businesses outside of Maryland have employees working in Maryland and do not want to be subject to the MWPCL for wage violations, the businesses should protect themselves through well-drafted employment agreements or policies that make choice of law provisions clear.

The Cunningham, et. al. v. Feinberg opinion is available at: http://www.mdcourts.gov/opinions/coa/2015/27a14.pdf or at Cunningham, et al. v. Feinberg, 2015 Md. LEXIS 12 (January 27, 2015).

Proper documentation between a company and its employees can be essential in managing the employer-employee relationship and protecting the company from liability. The Kagan Law Group assists in the thorough and competent review and drafting of all necessary documentation from hiring through separation of employment.  Contact us at (410) 216-7900 or visit our website at kaganlawgroup.com for more information about how our firm can help your business.

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