Maryland’s Paid Family and Medical Leave Insurance (FAMLI) Program

The Maryland General Assembly recently passed a final bill to establish new implementation dates for Maryland’s paid family and medical leave insurance (FAMLI) program. This program will allow employees to take time off from work to take care of themselves or a family member and still be paid up to $1,000 a week for up to 12 weeks within a 12-month period.

New Implementation Dates

The new FAMLI implementation dates are outlined in the final bill as follows:

January 1, 2027 – Payroll deductions would begin
January 1, 2028 – Benefits would become available

The Governor is expected to sign the final bill in the coming weeks, at which point, the Maryland Department of Labor (MD Labor) will begin implementing the proposed regulations.

State Contribution Rates and Plans

FAMLI will require both employers and employees to contribute a specified amount to a fund administered by the state. Every February, MD Labor will announce the contribution rate for the following state fiscal year (July 1 through June 30). Under current law, the total rate cannot exceed 1.2% of wages up to the Social Security cap. The rate will depend on payroll size:

15 or more employees – The rate will be 0.90% of covered wages up to the Social Security cap. Employers may withhold no more than half (0.45%) of the contribution rate from employees’ pay.
Fewer than 15 employees – The rate will be 0.45% of covered wages up to the Social Security cap. Employers may withhold up to this full amount from employees’ pay.

Employers may opt for a commercial or self-insured plan, with either the state or the private plan providing partial salary payments when a worker takes leave.

Eligibility for Benefits

Any employer who pays a salary or wage to at least one person working in Maryland, excluding the federal government, is covered under this program. An employee is eligible after working at least 680 hours in positions based in Maryland in the four calendar quarters reported before they take leave. This is not dependent on whether an employee lives in Maryland – only if his or her position is located in Maryland. Seasonal and part-time employees are eligible for this benefit, but independent contractors are not.

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

Employer Responsibilities

Employers will need to register with the state through an online web application called the FAMLI Division (the Division), which is expected to be available by Spring of 2025. Registered employers will automatically enroll into the State Plan administered by the FAMLI Division. An employer may apply to use either a commercial or self-insured plan.

Notifying Workers About Paid Family and Medical Leave

Employers will be required to notify workers about FAMLI:

Annually
Six months before benefits begin
When a worker is hired
When a worker requests paid leave
When an employer knows that a worker’s leave request may qualify

Contribution Amounts and Payroll Size

Employers will submit wage and hour reports each quarter to the Division, which will determine the amount of contributions due to the state. . All employers will be required to file these reports, even if they participate in a private plan. Employers will need to collect and make contributions for anyone working in a position located in Maryland, and workers cannot opt out of participating. Employers will need to disclose the average number of workers who live out-of-state, and then the Division will add that number to the average number reported in the employer’s wage and hour reports during the four previous quarters. If the total is below 15, employees will qualify for the lower contribution rate, which will be effective for one year.

Is Maryland’s FAMLI Different Than the Federal Family and Medical Leave Act?

FAMLI is different than the federal Family and Medical Leave Act (FMLA) because FAMLI offers paid time off, and eligibility includes a wider range of workers and the self-employed. If an event qualifies for leave through both programs, then both programs should run at the same time. In limited cases where an event only qualifies for FAMLI, an individual may not use any FMLA time while taking FAMLI.

Next Steps for Employers and Helpful Resources

Before FAMLI takes effect, employers can prepare by:

Signing up to receive update notifications on the MD Labor website
Including contributions in future budget planning
Reviewing current regulations
Considering how existing benefits may interact with FAMLI
Notating important upcoming dates
Review the Frequently Asked Questions from Employers page

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.