WHAT THIS BILL REGULATES · 2 REQUIREMENT TYPES
How Is This Bill Enforced
Verbatim statutory text on the left; plain-language analysis and a per-section checklist on the right. Numbered markers cross-link to the matching checklist row.
(A)(1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS INDICATED.
(A)(2) "ALGORITHMIC DECISION SYSTEMAlgorithmic decision system"Algorithmic decision system" means a computational process that facilitates decision making, including decisions derived from machines, statistics, facial recognition, and decisions on paper.Md. Code, Lab. & Empl. § 3-718(A)(2)" MEANS A COMPUTATIONAL PROCESS THAT FACILITATES DECISION MAKING, INCLUDING DECISIONS DERIVED FROM MACHINES, STATISTICS, FACIAL RECOGNITION, AND DECISIONS ON PAPER.
(A)(3) "AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3)" MEANS AN ALGORITHMIC DECISION SYSTEMAlgorithmic decision system"Algorithmic decision system" means a computational process that facilitates decision making, including decisions derived from machines, statistics, facial recognition, and decisions on paper.Md. Code, Lab. & Empl. § 3-718(A)(2) THAT AUTOMATICALLY FILTERS: (I) APPLICANTS OR POTENTIAL APPLICANTS FOR EMPLOYMENT; OR (II) FOR A TERM, CONDITION, OR PRIVILEGE OF EMPLOYMENT IN A WAY THAT ESTABLISHES A PREFERRED APPLICANT FOR EMPLOYMENT.
(A)(4) "DEPARTMENTDepartment"Department" means the Maryland Department of Labor.Md. Code, Lab. & Empl. § 3-718(A)(4)" MEANS THE MARYLAND DEPARTMENT OF LABOR.
(A)(5) "HIGH–RISK" MEANS AN ACT THAT IS LIKELY TO: (I) RESULT IN UNLAWFUL DISCRIMINATION; OR (II) HAVE AN UNLAWFUL DISPARATE IMPACT ON AN INDIVIDUAL OR A GROUP OF INDIVIDUALS ON THE BASIS OF AN ACTUAL OR PERCEIVED CHARACTERISTIC.
(A)(6) "IMPACT ASSESSMENTImpact assessment"Impact assessment" means a documented risk-based evaluation of a system that employs an algorithmic decision system.Md. Code, Lab. & Empl. § 3-718(A)(6)" MEANS A DOCUMENTED RISK–BASED EVALUATION OF A SYSTEM THAT EMPLOYS AN ALGORITHMIC DECISION SYSTEMAlgorithmic decision system"Algorithmic decision system" means a computational process that facilitates decision making, including decisions derived from machines, statistics, facial recognition, and decisions on paper.Md. Code, Lab. & Empl. § 3-718(A)(2).
Subsection (A) establishes the defined terms used throughout the section. The key definitions are automated employment decision tool — an algorithmic decision system that automatically filters applicants or establishes preferred applicants based on employment terms — and high-risk, which means an act likely to result in unlawful discrimination or disparate impact based on an actual or perceived characteristic. The impact assessment definition is notably spare: a documented risk-based evaluation of a system employing an algorithmic decision system, with further detail deferred to Department regulations under subsection (F).
(B) 1 EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION, AN EMPLOYER MAY NOT USE AN AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3) TO: (1) SCREEN APPLICANTS FOR EMPLOYMENT; OR (2) OTHERWISE HELP THE EMPLOYER DECIDE COMPENSATION OR OTHER TERMS, CONDITIONS, OR PRIVILEGES OF EMPLOYMENT IN THE STATE REGARDING APPLICANTS FOR EMPLOYMENT.
(C) 1 AN EMPLOYER MAY USE AN AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3) IF: (1) THE AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3): (I) WAS SUBJECT TO AN IMPACT ASSESSMENTImpact assessment"Impact assessment" means a documented risk-based evaluation of a system that employs an algorithmic decision system.Md. Code, Lab. & Empl. § 3-718(A)(6) DURING THE YEAR THAT IMMEDIATELY PRECEDES THE DATE THE EMPLOYER FIRST BEGINS USING THE AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3); AND (II) IS SUBJECT TO AN IMPACT ASSESSMENTImpact assessment"Impact assessment" means a documented risk-based evaluation of a system that employs an algorithmic decision system.Md. Code, Lab. & Empl. § 3-718(A)(6) EACH YEAR IT IS USED BY THE EMPLOYER; AND (2) THE IMPACT ASSESSMENTSImpact assessment"Impact assessment" means a documented risk-based evaluation of a system that employs an algorithmic decision system.Md. Code, Lab. & Empl. § 3-718(A)(6) REQUIRED UNDER ITEM (1) OF THIS SUBSECTION DETERMINE THAT USE OF THE AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3) WOULD NOT INVOLVE A HIGH–RISK ACTION.
Subsections (B) and (C) together form the bill's core prohibition-with-exception structure. Subsection (B) categorically prohibits employers from using an automated employment decision tool to screen applicants or to inform compensation and other employment terms. Subsection (C) then provides the sole exception: an employer may use such a tool if it was impact-assessed in the year before the employer began using it, is impact-assessed annually thereafter, and each assessment determines that the tool's use would not involve a high-risk action — meaning it is not likely to result in unlawful discrimination or disparate impact.
The practical effect is a conditional ban: employers cannot use these tools at all unless they maintain a current annual impact assessment with a clean finding. This differs from NYC Local Law 144, which requires a bias audit but does not condition use on a finding of no high-risk action.
(D) 2 IF AN EMPLOYER USES AN AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3) UNDER SUBSECTION (C) OF THIS SECTION, WITHIN 30 DAYS AFTER THE USE OF THE AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3), THE EMPLOYER SHALL NOTIFY EACH APPLICANT FOR EMPLOYMENT WITH RESPECT TO WHOM THE AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3) WAS USED THAT: (1) AN AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3) WAS USED IN CONNECTION WITH THE APPLICANT'S APPLICATION FOR EMPLOYMENT; AND (2) THE AUTOMATED EMPLOYMENT DECISION TOOLAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3): (I) WAS SUBJECT TO AN IMPACT ASSESSMENTImpact assessment"Impact assessment" means a documented risk-based evaluation of a system that employs an algorithmic decision system.Md. Code, Lab. & Empl. § 3-718(A)(6) UNDER SUBSECTION (C) OF THIS SECTION; AND (II) ASSESSED THE JOB QUALIFICATIONS OR CHARACTERISTICS OF THE APPLICANT.
Subsection (D) imposes a post-use notification obligation on employers who use an automated employment decision tool under the subsection (C) exception. Within 30 days of using the tool, the employer must notify each affected applicant that (1) an automated tool was used in connection with their application, (2) the tool was subject to an impact assessment, and (3) the tool assessed the applicant's job qualifications or characteristics. This is a retroactive disclosure — it is triggered after use, not before — and applies to every applicant processed by the tool.
(E) AN EMPLOYER THAT VIOLATES THIS SECTION SHALL BE ASSESSED A CIVIL PENALTY OF: (I) UP TO $500 FOR A FIRST VIOLATION; AND (II) AT LEAST $500 BUT NOT EXCEEDING $1,500 FOR A SECOND OR SUBSEQUENT VIOLATION. (2) (I) EACH FAILURE OF AN EMPLOYER TO PROVIDE THE NOTICE REQUIRED UNDER SUBSECTION (D) OF THIS SECTION WITHIN THE REQUIRED TIME PERIOD IS A SEPARATE VIOLATION. (II) EACH 30–DAY PERIOD THEREAFTER IN WHICH NOTICE IS NOT PROVIDED TO THE APPLICANT FOR EMPLOYMENT IS A SEPARATE VIOLATION.
Subsection (E) establishes the civil penalty schedule for violations. A first violation carries a penalty of up to $500; second and subsequent violations carry penalties of $500 to $1,500. The penalty-stacking provision is significant: each failure to provide the subsection (D) notice to an individual applicant is a separate violation, and each subsequent 30-day period in which notice remains outstanding constitutes an additional separate violation. For an employer using an automated tool on a large applicant pool, penalties could accumulate rapidly.
(F) 3 THE DEPARTMENTDepartment"Department" means the Maryland Department of Labor.Md. Code, Lab. & Empl. § 3-718(A)(4) SHALL ADOPT REGULATIONS TO CARRY OUT THIS SECTION, INCLUDING REGULATIONS GOVERNING THE DEVELOPMENT AND PERFORMANCE OF IMPACT ASSESSMENTSImpact assessment"Impact assessment" means a documented risk-based evaluation of a system that employs an algorithmic decision system.Md. Code, Lab. & Empl. § 3-718(A)(6) FOR AUTOMATED EMPLOYMENT DECISION TOOLSAutomated employment decision tool"Automated employment decision tool" means an algorithmic decision system that automatically filters: (I) applicants or potential applicants for employment; or (II) for a term, condition, or privilege of employment in a way that establishes a preferred applicant for employment.Md. Code, Lab. & Empl. § 3-718(A)(3).
Subsection (F) directs the Maryland Department of Labor to adopt regulations implementing the section, specifically including regulations governing the development and performance of impact assessments for automated employment decision tools. This is significant because the statute's definition of impact assessment is minimal — a documented risk-based evaluation — and the substance of what an adequate assessment must contain is left entirely to rulemaking.
AND BE IT FURTHER ENACTED, That this Act shall take effect October 1, 2024.
Section 2 sets the effective date of the Act as October 1, 2024. Because the bill did not advance, this date is moot.