Maryland FAMLI Program Update: New Requirements, Employer Registration and Private Plan Guidance

Maryland is joining 14 other states in providing a paid family and medical leave insurance (FAMLI) program for employees working in the state. This program will allow eligible employees to take time off from work to care for themselves or a family member while receiving partial wage replacement of up to $1,000 per week for up to 12 weeks within a 12-month period.

Updated Implementation Dates

The current FAMLI implementation dates are as follows:

January 1, 2027 – Payroll deductions and employer contributions begin
April 30, 2027 – First quarterly wage and contribution reports are due for Q1 2027
January 3, 2028 – Benefits become available to eligible employees

State Contribution Rates and Plans

FAMLI requires contributions to fund benefits provided through either the State Plan or an approved private plan.

State Plan

Employees and employers will begin contributing on January 1, 2027. The definition of “wages” under FAMLI will align with Maryland’s Unemployment Insurance wage definition. The contribution rate will be 0.90% of covered wages up to the annual Social Security wage cap.

Contribution requirements depend on employer size:

Employers with 15 or more workers: Employers are required to contribute 0.45% of covered wages and may withhold up to 0.45% from employees.
Employers with 14 or fewer workers: Employers are not required to contribute but may withhold up to the full 0.45% employee share. Employers may voluntarily contribute some or all of the employer portion.
Employer size is determined based on the total number of employees working for the employer in all states, not just Maryland employees.
Employers may choose to pay part or all of the employee contribution on behalf of employees, although doing so may create taxable income for employees.
Self-employed individuals may elect to participate in the program by opting in and paying the full 0.90% contribution rate.

Private Plans

Employers may choose a private plan rather than participating in the State Plan.

There are two types of private plans:

Commercial private plans
Self-insured private plans

Private plans must provide benefits that are equal to or greater than the benefits available under the State Plan and must be approved by the Maryland FAMLI Division. Employers intending to offer a private plan must file a Declaration of Intent through their FAMLI online account between September 1, 2026 and November 15, 2026.

Private plan applications are expected to become available during Summer 2027 and must be submitted by October 1, 2027.

During 2027, employers pursuing a private plan may:

Fund an escrow account directly
Withhold employee contributions at a rate no greater than the State Plan rate
Use a combination of employer funding and employee contributions

Once approved for a commercial private plan, employers must return any employee contributions previously collected. Employers approved for a self-insured plan may use escrowed employee contributions to fund a separate account dedicated to FAMLI benefits.

Employers with approved private plans will be subject to annual state fees. Self-insured plans carry a $1,000 annual fee, while commercial plan fees range from $100 to $1,000 depending on employer size.

Even employers using private plans must continue filing quarterly wage and hour reports through the FAMLI system.

Employer Registration Requirements

Any employer that pays wages to at least one employee working in Maryland is covered by FAMLI, excluding the federal government. There are no exemptions based on employer size, industry, nonprofit status, or religious affiliation. All Maryland employers must comply with the program.

Online employer registration is now available through the Maryland FAMLI website and must be completed by an authorized officer of the company. Registered employers will automatically enroll in the State Plan unless they pursue an approved private plan.

Eligibility for Benefits

Employees become eligible for FAMLI benefits after working at least 680 hours in positions localized in Maryland during the four completed calendar quarters immediately preceding the leave event. Employee eligibility is based on where the employee works, not where the employee lives. Seasonal and part-time employees may qualify if they meet the hour requirement. Independent contractors are not eligible unless they qualify as self-employed individuals who elect to participate in the program.

What Qualifying Events Could a Worker Use Leave For?

The following events would qualify a Maryland worker to use FAMLI leave:

To welcome a child into their home, including through adoption and foster care
To care for themselves if they have a serious health condition
To care for a family member with a serious health condition
To make arrangements for a family member’s military deployment

These qualifying reasons generally align with those found under the federal Family and Medical Leave Act (FMLA).

FAMLI and FMLA Interaction

FAMLI differs from the federal Family and Medical Leave Act because it provides paid benefits and covers a broader group of workers. In most situations, FAMLI and FMLA requirements are closely aligned, including:

The same qualifying leave events
The ability to take leave consecutively or intermittently
Continuation of group health benefits under the same conditions that applied while actively employed

If an event qualifies under both programs, leave generally runs concurrently.

Interaction with Other Leave Benefits

Employers cannot require employees to exhaust employer-provided paid time off before beginning or while receiving FAMLI benefits. However, employers and employees may mutually agree to use employer-provided paid leave to “top off” FAMLI benefits and provide up to full wage replacement.

If an employer already provides parental leave benefits, the employer may require those benefits to run concurrently with FAMLI leave when permitted by law. FAMLI and short-term disability benefits may run concurrently, with FAMLI serving as the primary benefit program. Workers’ compensation and FAMLI generally cannot be received at the same time unless the employee is receiving paid permanent disability benefits.

Employer Responsibilities

Employers must:

Register with the Maryland FAMLI program
Submit quarterly wage and hour reports
Collect and remit required contributions, where applicable
Maintain records necessary for compliance
Respond to employee leave notices as required

Notifying Workers About Paid Family and Medical Leave

Employers are required to notify workers about FAMLI:

Annually
When a worker is hired
When a worker requests paid leave
When an employer knows that a worker’s leave request may qualify

Claims Process

The FAMLI claims process will generally operate as follows:

The employee submits a claim.
The employer receives notice of the claim and has five business days to respond if there are eligibility or claim concerns.
After the response period, the FAMLI Division begins processing the application and generally issues a determination within 10 days.
For State Plan participants, benefits are paid directly by the State.
For approved private plans, benefits are paid through the employer’s private plan funding mechanism.

Next Steps for Employers and Helpful Resources

Before contributions begin, employers can prepare by:

Registering with the Maryland FAMLI program
Monitoring updates issued by the Maryland Department of Labor
Including anticipated contributions in future budget planning
Reviewing whether a private plan may be advantageous
Evaluating how existing leave policies, parental leave benefits, PTO programs, and disability plans interact with FAMLI
Notating important implementation deadlines
Review employer guidance

As more information emerges regarding FAMLI, Brown Plus will continue to update our blog with the latest information. If you have any questions regarding how FAMLI may affect your business’ payroll and bookkeeping, please contact a Brown Plus advisor.