On July 13, 2022, Maryland’s highest court issued a wide-reaching decision in Amaya v. DGS Construction, LLC that could have a substantial impact on personnel costs for companies doing business in Maryland. The unanimous ruling opened the door for employees to seek payment of wages for time spent waiting at a jobsite and/or traveling to and from a client work site under certain circumstances. Although Amaya involved construction employees, the decision is very likely to touch many companies operating in Maryland and will likely have an impact across all industries. Companies based in or who have employees working in Maryland should take immediate notice of the Amaya decision and adjust hourly reporting and wage payment practices as necessary to avoid potential wage-and-hour liability.

The Amaya decision was a consolidated opinion resolving two related cases. In both cases, construction workers sued their employers for unpaid regular and overtime wages related to uncompensated waiting and travel time before and after working at a construction site. The construction workers alleged that, as part of their employment, they were required to report to and, as necessary, park their personal vehicles, at a specific off-site location. The workers would then take a company-provided shuttle bus to a construction site, go through security screening, check in with a supervisor, obtain tools to perform their job, and then begin their work. At the end of the workday, the workers would do the reverse: finish their work, return their tools, check out, exit through security, and take the shuttle bus back to the reporting location. The companies did not pay wages to the workers for time spent waiting at the reporting location, traveling in the shuttle to the construction site, or going through security screenings. Workers were only paid for the time spent performing their primary duties at the construction site.

The companies’ wage-and-hour practices were based on the Portal-to-Portal Act (PPA), a federal statute which establishes that “walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which [an] employee is employed to perform” and time spent on “activities which are preliminary to or postliminary to said principal activity or activities” “which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities” are not compensable.

By way of a simplistic example, the PPA allows a drywall installation worker to be paid for the eight hours of drywall installation work performed in a given day, with some possible employee-specific exceptions, but it does not require an employer to pay for the commuting time, waiting time, or travel time that occurred prior to or after those eight hours.

The workers in Amaya challenged the applicability of the PPA to claims made under the Maryland Wage and Hour Law and Maryland Wage Payment and Collection Law, the two Maryland state statutes that enforce Maryland’s minimum wage, overtime, and other wage payment requirements. And, the court obliged them, finding that the PPA has not been adopted or incorporated into Maryland law through Maryland’s wage payment statutes or in the regulations implementing them. Specifically, the court held that “the PPA—which provides, among other things, that traveling to the actual place of performance of principal activity or activities which an employee is employed to perform is not compensable—has not been implicitly adopted into Maryland law.” The court further concluded that whether workers are entitled to be paid for time spent waiting at a parking or other reporting location and traveling to a jobsite must be resolved under Maryland law (as opposed to federal law).

The practical impact of the Amaya decision is that the construction companies that employed the workers could be responsible for compensating each construction worker for the unpaid waiting and travel time they experienced under the above-referenced policies. The court noted the time was estimated at two hours per day, every workday, per worker. Even at Maryland’s $12.50 minimum wage (as of January 1, 2022), a company could owe a team of 20 construction workers $500 per day in back wages for every day of a construction project (or more if the unpaid time constituted overtime), not counting any penalties, interest, or attorneys’ fees that may be assessed against the employer.

When read in conjunction with existing Maryland statutory provisions, the decision will broadly and drastically impact employers beyond just the parties to the litigation. Maryland law has an expansive definition of what it means to employ a worker. Under Maryland’s employment statutes, the term “employ” “means to engage an individual to work”; “allowing an individual to work”; and “instructing an individual to be present at a work site.” And Maryland regulations define an employee’s “hours of work” to be “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.”

The court’s ruling will not only reach those companies that are based in Maryland. Given Maryland’s broad application of its wage payment statutes, it will impact companies that have Maryland-based contracts or projects, companies that employ individuals who live in Maryland, or companies that request employees to travel to Maryland, even if only from time to time or on rare occasions.

Moreover, the Amaya decision and these broad definitions will not only impact the construction industry, where off-site reporting locations and shuttle bus use are common in order to meet “good neighbor” requirements, which prevent parking and traffic congestion and safety issues at the construction site itself. They will impact, for instance, any industry where workers may be obligated to utilize an off-site or distant parking location, enter a worksite through security screening, or meet other pre-shift obligations before beginning the actual work of their workday. This could include field workers, manufacturing employees, airline employees, and government contractor’s employees who work in secure areas or who must pass through extensive security screenings before reaching their work location, among many others. The impact on employers is expected to be significant.

There is one saving grace from the court’s ruling. The decision in Amaya is limited to situations where workers were required to report to a parking area or other reporting location or take a shuttle to a worksite. The court noted that, if workers were not required to report to a specific parking area or reporting location, then the workers would not be entitled to compensation for waiting or travel time to a jobsite.

With all this in mind, companies that are based in, operate in, or have employees who frequently or occasionally work in Maryland should take immediate steps to modify hourly reporting and payment practices that do not comply with the Amaya ruling. Maryland’s employment laws punish wage payment violations harshly, awarding an aggrieved employee up to three times the back wage owed, plus attorneys’ fees, unless the employer can prove there was a bona fide dispute that led to the non-payment. Following Amaya, it will be difficult for employers to prove a bona fide dispute for waiting and travel time moving forward; thus, prompt corrective action is required to protect a company’s bottom line.

If you have questions about how the Amaya ruling could impact your business or adjusting your hourly reporting and wage payment practices, please contact Matt Feinberg, the author of this client alert, or another member of PilieroMazza’s Litigation & Dispute Resolution or Labor & Employment practice groups.