SB938 is a broad worker-protection and fraud-enforcement bill that expands the Maryland False Claims Act and significantly revises several labor and procurement enforcement statutes. It adds unemployment insurance-related false statement conduct to the False Claims Act, directs certain recovered penalties and damages into the Unemployment Insurance Fund, and requires prevailing-wage-related recoveries under the False Claims Act to be used to provide restitution directly to affected workers. The bill also creates a new Worker Protection Unit within the Office of the Attorney General to investigate and prosecute violations of workers’ rights laws.
The bill substantially expands the State’s workplace misclassification framework. It replaces the prior industry-limited workplace fraud subtitle with a broader statewide scheme covering employers, general contractors, higher-tier contractors, subcontractors, and other persons engaging workers in Maryland. It changes the test for determining whether a worker is an employee, bars private agreements from waiving the subtitle or serving as a defense, authorizes inspections, subpoenas, administrative warrants, citations, penalties, restitution, and judicial review, and adds joint liability rules for general contractors and higher-tier contractors in construction-related projects. It also authorizes the Attorney General to bring actions in larger cases involving multiple workers or significant underpayment, and extends remedies to successor entities.
The bill also strengthens wage, prevailing wage, and wage-payment enforcement. It amends the Maryland Wage and Hour Law, the Wage Payment and Collection Law, and prevailing wage provisions to allow the Attorney General to sue in certain multi-worker or high-dollar cases, to seek liquidated damages and civil penalties, and to pursue restitution and other relief. It adds anti-retaliation protections and makes clear that employee agreements to accept lower wages or independent-contractor status do not bar recovery. In procurement law, it expands debarment grounds for repeated, willful, or knowing violations of labor and wage statutes and requires public bodies and licensing authorities to be notified of certain violations.
The general sentiment reflected by the bill’s structure and sponsorship is strongly pro-enforcement and pro-worker, with the Attorney General’s office driving the proposal. Although no committee transcripts or recorded votes were provided, the bill’s detailed enforcement tools, expanded remedies, and creation of a dedicated enforcement unit suggest an intent to aggressively deter wage theft, misclassification, retaliation, and related fraud. The bill appears designed to centralize and strengthen state enforcement rather than rely primarily on private lawsuits.
The main points of contention likely center on the bill’s breadth and enforcement power. Employers and contractors may object to the expanded employee-presumption test, the statewide application beyond construction and landscaping, joint and successor liability, administrative search warrants, and the ability to suspend or revoke licenses based on labor violations. Worker advocates, by contrast, would likely support the bill’s stronger penalties, broader standing for the Attorney General, anti-waiver provisions, and direct restitution mechanisms. The bill’s reach into licensing, procurement, and multiple labor statutes makes it a significant compliance and enforcement measure for businesses and contractors.
SB938 would amend the Maryland False Claims Act, the Labor and Employment Article, the State Finance and Procurement Article, and the State Government Article. It expands liability and remedies for wage theft, worker misclassification, prevailing wage violations, retaliation, and certain unemployment insurance fraud, while creating a new Worker Protection Unit in the Office of the Attorney General. The bill also changes debarment and licensing consequences for covered violations and directs some recovered funds to the Unemployment Insurance Fund or directly to affected workers, depending on the violation.
The bill’s overall tone is strongly enforcement-oriented and worker-protective. Even without recorded testimony or votes, the text shows a clear policy choice to give the Attorney General and labor agencies more authority, more remedies, and more tools to investigate and penalize violations. The proposal appears to be framed as an anti-fraud and wage-protection measure rather than a narrow labor-law adjustment.
Likely areas of dispute are the bill’s expanded definition of employer-employee relationships, its statewide reach beyond the prior construction/landscaping focus, and the new powers for inspections, subpoenas, administrative warrants, license suspension, and debarment. Employers, contractors, and licensing-regulated professionals may view these provisions as burdensome or overbroad, while worker advocates and enforcement officials are likely to support them as necessary to deter misclassification, wage theft, and retaliation. The bill also raises potential concerns about successor liability and the limits it places on private agreements and defenses.