test 33 
Is Your Maryland Business Ready for New Diversity Requirements?
Skip to content

HR + Payroll Software

Is Your Maryland Business Ready for New Diversity Reporting Requirements?

One-Minute Takeaway

  • Maryland businesses receiving state benefits of $1 million+ are required to comply with HB 1210 regarding corporate diversity.
  • Single-member LLCs, sole proprietorships, companies with budgets/sales less than $5 million, and private companies with at least 75% shareholders being family members are excluded.
  • All organizations must submit an annual report with their diversity data to the Maryland Department of Assessments and Taxation.

Maryland has enacted House Bill 1210, “Corporate Diversity—Board, Executive Leadership, and Mission,” which went into effect July 1, 2022, and phases in over a two-year timeframe. This bill mandates that certain covered businesses must prove that they have members of underrepresented communities either on their boards of directors or serving in executive leadership roles, or demonstrate they support these communities in their mission statements to be eligible for a state benefit equal to or greater than $1 million.

“Underrepresented communities,” as defined by the bill, include people who self-identify as African American, Asian, Black, Hispanic, Latino, Native Alaskan, Native American, Native Hawaiian, Pacific Islander, or any combination of these ethnic or racial communities.

Which Maryland Businesses Are Affected by House Bill 1210?

HB 1210 applies to most businesses that are incorporated or registered to do business in Maryland that receive state grants, tax credits, or contracts of more than $1 million per year. The Maryland Department of Assessments and Taxation (MDAT) approximates that there are around 430,000 businesses that submit annual reports to the state, including corporations, foundations, schools, hospitals, and other legal entities that don’t benefit a single private shareholder.

The majority of the bill doesn’t apply to single-member limited liability companies, sole proprietorships, businesses with annual operating budgets or annual sales of less than $5,000,000 that don’t qualify for state benefits, or private companies with at least ¾ of the shareholders being family members.

If your organization receives state benefits, the bill may apply. Compliance is required if:

The Maryland Chapter of NAIOP, the U.S. Commercial Real Estate Development Association, estimates more than 12,000 entities operating in the state received state grants of more than $1 million and nearly 2,000 businesses received payments of $1 million or more in 2020, indicating that a sizable portion of organizations in Maryland may be affected.

What Reporting is Required by HB 1210?

The bill requires the Maryland Department of Commerce (DOC) and the Governor’s Office of Small, Minority, and Women Business Affairs (GOSBA) to create a report of diversity data that all businesses must now file with the state. This means that, even if the rules don’t apply to your business, you’re still required to submit your organization’s diversity data to the state.

The data in the report must include the membership of underrepresented communities on your board of directors or executive leadership team as well as show how your organization’s mission supports those communities. Additionally, if the requirements of the bill apply to your business, you must now submit an annual report to MDAT that includes your organization’s diversity data.

The DOC has published regulations to satisfy the requirements of the bill. If your business is focusing on the governance or social component of an Environmental, Social, and Corporate Governance (ESG) program, and does business with the state of Maryland, HB 1210 may aid your organization in that endeavor.

How Paycor Helps

We hope this information helps you understand the potential impact of Maryland House Bill 1210 on your organization. As always, Paycor is here to help you navigate through these changes. Learn more about how Paycor Smart Sourcing can help you recruit active and passive job candidates, how Analytics & Reporting can help you gather the right data for Maryland’s new reporting requirements, and how our Compliance Solutions can help keep everything in check.