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)–(6) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS INDICATED. (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. (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. (4) "DEPARTMENTDepartment"Department" means the Maryland Department of Labor.Md. Code, Lab. & Empl. § 3–718(A)(4)" MEANS THE MARYLAND DEPARTMENT OF LABOR. (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. (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) defines six terms that govern the scope of the bill. The defined terms are broad: algorithmic decision system encompasses any computational process facilitating decision making, and automated employment decision tool is any such system that automatically filters applicants or establishes preferred applicants based on employment terms. The high-risk definition ties the bill's prohibition trigger to the likelihood of unlawful discrimination or disparate impact based on actual or perceived characteristics — a formulation that tracks existing Maryland anti-discrimination law rather than creating an independent standard.
(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 operative prohibition. Employers are categorically barred from using automated employment decision tools to screen applicants or determine compensation and other employment terms — unless two cumulative conditions are met: the tool was subject to an impact assessment in the year immediately before the employer first began using it, the tool undergoes an annual impact assessment each year of use, and each assessment determines that use would not involve a high-risk action (likely unlawful discrimination or disparate impact). This structure effectively converts an outright prohibition into a conditional-use regime gated by annual bias auditing.
(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 notice obligation: when an employer uses an automated employment decision tool under the impact-assessment exception, it must notify each affected applicant within 30 days. The notice must disclose three facts: that an automated tool was used, that it was subject to an impact assessment, and that it assessed the applicant's job qualifications or characteristics. This is a post-decision notice requirement — the statute does not require pre-use disclosure or consent.
(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 a tiered civil penalty structure enforced by the Maryland Department of Labor. A first violation carries a penalty of up to $500; second and subsequent violations carry penalties of $500 to $1,500. The bill specifies that each failure to notify an individual applicant is a separate violation, and each additional 30-day period in which notice remains unprovided is also a separate violation — creating a per-applicant, per-period penalty accumulation structure that could result in substantial aggregate liability for employers screening large applicant pools.
(F) 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 implementing regulations, specifically including regulations governing the development and performance of impact assessments for automated employment decision tools. This rulemaking mandate is significant because the bill's definitions of impact assessment and high-risk are skeletal — the practical compliance standard would depend heavily on the Department's regulations.