DLLR at Your Door June 2009

A Message from Secretary Perez

Workplace fraud bill signing with Governor Martin O'MalleyOn May 7, Governor O’Malley signed into law the Workplace Fraud Act of 2009. This new law provides the state with tools to crack down on workplace fraud, which involves employers who wrongly classify their employees as independent contractors or do not classify them at all. This practice allows employers to cut payroll costs significantly, leaving workers unprotected by critical workplace protection laws and creating a competitive disadvantage for those employers who play by the rules. Workers who are misclassified as independent contractors are denied access to unemployment insurance, workers’ compensation and other protections, and the taxpayers are deprived of millions of dollars to the Unemployment Insurance Trust fund and the State General Fund.

The bill was the result of a deliberative process that brought together stakeholders from industry, labor and government to discuss the issue and find the best solution. Beginning last fall, the stakeholders gathered in a work group process that lasted through the end of the legislative session. The result was a legislative product that was able to satisfy the concerns of many while accomplishing the critical goal of addressing the growing problem of workplace fraud. I am appreciative of all of the hard work of those involved, and look forward to their continued engagement as we work to implement the new law. For more information about the law, visit the Workplace Fraud web page.

Legislative Session

In addition to the Workplace Fraud Act, DLLR saw the passage of a number of other critical bills during the 2009 session:

  • The Governor has already signed emergency legislation to allow part time workers to collect unemployment benefits. Previously, unemployment benefits were only granted to those seeking full time work. However, this outdated rule failed to account for the realities of the modern workforce, in which nearly 15 percent of Maryland workers work part time. The new emergency law signed today will ensure that those Marylanders who are unable to work full time because of family, medical or other obligations can still access the critical safety net that unemployment insurance provides to take care of their families, particularly during times of economic distress.
  • Another new law increases the maximum weekly benefit that an unemployment insurance recipient can receive. Beginning October 4, 2009, the maximum benefit will increase from $380 to $410. The following year, the maximum will increase to $430. This new law recognizes the need to adjust the benefit amount for inflation, and acknowledges that unemployment insurance is a critical social safety net, particularly during times of economic distress, that allows unemployed workers to continue paying their expenses while also putting money back into the local economy.
  • Another bill passed and signed into law adopts federal requirements created by the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, or the SAFE Act. This law builds on the progress Maryland made last year in setting stricter standards for mortgage industry licensing.  The bill requires the licensing of all mortgage originators through the Nationwide Mortgage Licensing System, and will allow Maryland’s Commissioner of Financial Regulation to share information with other states.  This information will be vital in improving Maryland’s enforcement efforts and enhancing consumer protection.

BEWARE of Unlicensed Home Improvement Contractors!

Summer is here, which means many Marylanders are beginning home improvement work. If you plan to hire a BEWARE of unlicensing home improvement contractorscontractor to help with your home improvement project, be sure to check that the contractor is licensed with the Maryland Home Improvement Commission.

Homeowners who use Maryland Home Improvement Commission (MHIC) licensed contractors are protected by the Home Improvement Law, and are eligible for coverage by the Home Improvement Guaranty Fund. The Guaranty Fund provides homeowners with up to $20,000 dollars for losses caused by poor or incomplete work by MHIC licensed contractors. However, if a homeowner hires an unlicensed contractor, they are not eligible for payment from the guaranty fund, and their only recourse is through the courts.

Remember, if a contractor offers you a deal that sounds too good to be true, it probably is! Saving money in the short term by hiring an unlicensed contractor could cost you in the long run. Call 888-218-5925 to check the status of a contractor’s license before you sign a contract, or visit the Maryland Home Improvement Commission web page.

New Crane Safety Rules

New Crane Safety RulesMaryland has new crane safety rules, which are among the strictest in the nation, and are the result of recommendations made by a crane safety task force convened by Labor and Industry Commissioner Ron DeJuliis last year. The task force was comprised of a cross section of industry, labor and regulatory representatives and was charged with developing a strategy to increase training levels for crane operators, operator trainees, riggers and signal people.

The new regulations require specified training levels for those involved in crane operations, and require employers to keep training records. They also require daily inspections of crane equipment. Contractors and employers to whom the regulations apply will have a transition period through the end of the calendar year, during which Maryland Occupational Safety and Health will inspect for compliance, but will not issue citations or sanction civil penalties for any violations of the new requirements. Notices of violations will be issued to help assist contractors with compliance. For more information about the new requirements, visit our Web site.

Avoid Loan Modification Scams

The Commissioner of Financial Regulation is receiving a growing number of complaints regarding third parties who offer to "assist" homeowners in negotiating with lenders and servicers to obtain a loan modification or otherwise prevent foreclosure, frequently in exchange for up-front fees. Investigations have shown that these providers often charge high fees, yet often provide substandard services, or no services at all, leaving the homeowner closer to foreclosure and in a worse financial situation. The Commissioner has also seen an increasing number of advertisements, direct-mail solicitations and other marketing offering these services - typically described as "loan modification," "loss mitigation," or "foreclosure prevention consulting" - in exchange for up-front fees.

Up-front fees are illegal under the Protection of Homeowners in Foreclosure Act and the Maryland Credit Services Business Act. These statutes also mandate other consumer protections, including requiring such companies to be licensed as Credit Services Businesses, subject to certain exemptions.

Homeowners having trouble making mortgage payments should call the HOPE hotline at 1-877-462-7555 to connect with non-profit housing counseling services. If you have been a victim of a loan modification scheme or any other form of mortgage fraud, call the Office of the Commissioner at 1-888-784-0136.

Maryland Department of Labor, Licensing and Regulation
500 N. Calvert Street / Baltimore, Maryland 21202
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