Maryland Employers Beware – State Wage Laws Do Not Incorporate Federal Portal-to-Portal Act and Its Exclusions from Compensation

Maryland’s highest court has ruled that the federal Portal-to-Portal Act has not been adopted or incorporated into Maryland’s Wage and Hour Law, Wage Payment and Collection Law, or the corresponding state regulations – meaning that employers may be responsible for more wages for their Maryland employees under state law than under federal law.

Federal law. The federal Portal-to-Portal Act is an amendment to the Fair Labor Standards Act. The Portal-to-Portal Act excludes from working time the time spent traveling to and from the actual place of performance of the employee’s principal employment activity, as well as preliminary and postliminary activities to that principal activity. Therefore employers are not required to compensate employees for such time.

State law. As relevant to this case, Maryland law requires compensation for all hours of work. The state regulations implementing Maryland’s wage laws provide that “‘Hours of work’ means the time during a workweek that an individual employed by an employer is required by the employer to be on the employer’s premises, on duty, or at a prescribed workplace.” They also provide that travel time is hours worked if the individual “[t]ravels during regular work hours” or “[t]ravels from one worksite to another.” Until now, it has been unclear whether the state law incorporated the federal Portal-to-Portal Act and therefore whether the regulations should be applied in that context.

Background of the case. Amaya v. DGS Construction, LLC involved the construction of the MGM National Harbor resort and casino. Because there was no parking available at the project site, the general contractor provided a parking area for subcontractor employees. The subcontractor employer directed its workers to park at the parking area, take a contractor-provided bus to and from the project site, and go through security at the site – a process that took approximately two hours a day, for which the employees were not paid.

Several employees filed class actions on behalf of themselves and their similarly-situated co-workers seeking wages and overtime pay under state law for this time. The trial courts found that Maryland had implicitly adopted the Portal-to-Portal Act, and dismissed the employees’ claims. The intermediate appellate court (the Maryland Court of Special Appeals) agreed and upheld the dismissals.

The Court of Appeals’ Ruling. Maryland’s highest state court, however, disagreed with the trial courts and the Maryland Court of Special Appeals. Rather, it found that the Portal-to-Portal Act has not been adopted into Maryland law. Thus, “what constitutes ‘work’ under Maryland law is not limited to what is compensable work under the [Portal -to-Portal Act] and the [Fair Labor Standards Act].”

Consequently, the definitions of “hours of work” under state law come into play. The Court of Appeals found that there were disputes of fact as to whether the workers were required to report to the parking area, whether the parking area was the employer’s premises or a prescribed workplace, or whether the workers were required to be on duty, and therefore were engaged in hours of work. The cases will be sent back to the trial courts for a fact finder to resolve these questions.

Lessons for Employers. Maryland, like many other states, has adopted wage-hour rules different from federal law. To stay in compliance, it is not enough to follow the federal law. State law must also be ascertained and followed. And employers in Maryland should recognize that activities exempted from payment under federal law may require compensation under state law.