Maryland Family and Medical Leave Insurance Program Overview and Employer Responsibilities
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In 2022, the Maryland General Assembly passed a law establishing the Family and Medical Leave Insurance (FAMLI) Program. The employer contributions into the program will start on January 1, 2027, and employees will be eligible for benefits starting on January 1, 2028.
Program Basics
Starting on January 1, 2028, employees will be able to take up to twelve weeks of paid continuous or intermittent leave for qualifying family and/or medical events within a 12-month period. Employees may take 24 weeks of paid family and medical leave within the same benefit year in one specific circumstance; if the employee has their own serious health condition and welcomes a child in the same benefit year.
Each employee will be eligible for up to $1,000 per week for the 12 weeks. The dollar amount of weekly benefits will be based on a comparison between the employee’s average weekly wage and the State Average Weekly Wage. Depending on the employee’s wage, they could receive less than $1,000 per week.
Qualifying events include:
1. Caring for or bonding with a child of the employee during the first year after the child’s birth or placement, if the child is placed with the employee through foster care, kinship care, or adoption;
2. Caring for a family member with a serious health condition;
3. An employee’s serious health condition that results in the employee being unable to perform the functions of their position;
4. Caring for an eligible service member for whom the employee is next of kin; or
5. An employee’s qualifying exigency arising out of the deployment of an eligible service member who is a family member of the employee.
Family members include children (biological, adopted, foster, step, and those of which the employee has legal or physical custody or guardianship), parents of the employee or their spouse (biological, adoptive, foster, step, or former legal guardian), spouse, domestic partner, grandparent or grandchild of the employee (biological, adoptive, foster, or step), or siblings of the employee (biological, adopted, foster, or step).
To be eligible to receive benefits under the program, the employee must be “localized” in Maryland, which means the work is physically performed in Maryland. If an employee works multiple jobs within Maryland, they can request leave under the FAMLI Program under each employer. Additionally, an employee must work at least 680 hours over the previous four reported calendar quarters within the state of Maryland to be eligible for benefits. These hours can be spread across multiple employers. Part-time and seasonal employees will be eligible for benefits if they meet the 680-hour requirement.
Employer Responsibilities
Employers with employees who work in Maryland have several responsibilities under the new FAMLI Program. The law does not include any exceptions, including for small businesses or agricultural employers. Additionally, the law does not distinguish between domestic employees and employees who work for the business through a work visa, like the H-2A Program.
Registration
All employers with at least one employee who works in Maryland must register with the FAMLI Program. Only authorized officers of the business are permitted to register the business with the FAMLI Program. Authorized officers are those who have the legal authority to act on behalf of the business, which can include owners, partners, executive directors, presidents, secretaries, CEOs, CFOs, and COOs. Once one of the authorized officers has created the business’ account, other authorized officers and third-party agents, like CPAs, payroll administrators, and/or HR, can be added to the profile to help manage and complete reporting requirements and respond to FAMLI claims.
For a step-by-step registration guide, please click here.
Plan Selection
Employers will automatically be enrolled into the state-run FAMLI Program after registration. If an employer is utilizing a commercial or self-insured plan, it can seek approval to continue or start utilizing that plan in place of the state-run plan. To receive approval, the commercial or self-insured plan must provide equal or better benefits than the state-run plan. If an employer receives approval, it will still be required to submit quarterly wage and hour reports and data related to claims. An employer utilizing a commercial or self-insured plan may be required to pay a fee set by the Maryland Department of Labor. If an employer intends to utilize a commercial or self-insured plan, it must begin keeping employee and employer contributions in an escrow account starting in January 2027. A declaration of intent to use a commercial or self-insured plan must be submitted to the Maryland Department of Labor by November 15, 2026 for contributions in 2027.
Employee Notification
All employees must be notified of their rights under the FAMLI Program at multiple intervals:
1. One pay period before payroll deductions begin;
2. Six months before benefits begin, which will be July 2027;
3. When the employee is hired;
4. Once a year;
5. When an employee requests leave indicating they want to take the leave under the FAMLI Program; and
6. When an employer knows the employee is taking leave for a qualifying reason.
Payroll Deductions and Reporting
Employers are responsible for making the necessary payroll deductions. The FAMLI Program is funded through employer and employee contributions, equal to 0.9% of the employee’s wages per paycheck for wages paid between January 1, 2027 and December 31, 2027. The Maryland Department of Labor will set the contribution rate annually. The 0.9% contribution can be split evenly, 0.45% and 0.45%, between employer and employee contributions. An employer can also choose to contribute the entire 0.9% and not withhold any wages from their employees. The maximum amount that an employer can withhold from an employee’s wages is 0.45%. Contributions owed to the state will be calculated and collected from quarterly wage and hour reports. The first wage and hour report and contribution will be due in April 2027, and this report will cover payroll deductions from January 2027 through March 2027.
Maryland did create a separate contribution structure for small employers, which are employers with less than fifteen employees total, not just within the state of Maryland. In other words, if an agricultural business has eight employees working at the farm in Maryland, five employees working at the farm in Pennsylvania, and five employees working at the farm in Delaware, it would not be considered a small employer. A small employer is only required to remit 0.45% of its employees’ wages to the state instead of the full 0.9%. The 0.45% that the employer is required to remit can be contributed entirely by the employees. In 2027, employer size will be evaluated quarterly to determine qualification as a small employer. After 2027, the evaluation and determination will be made annually.
FAMLI and Employer Provided Time Off
Employers may not require employees to use paid time off provided by the employer in place of or while using benefits from the FAMLI Program. However, due to the $1,000 per week maximum benefit, employees can agree to use employer paid time off to “top off” the benefits. So, if an employee makes $1,250 per week, $1,000 of the weekly wage could come from FAMLI and the additional $250 could come from employer provided paid time off.
Tax Implications
Stay tuned for a future article discussing the tax implications of contributions and benefits for both employers and employees.
To read the new FAMLI laws and regulations, click here.
To learn more about the FAMLI Program and other new Maryland laws, regulations, and programs, register for ALEI’s 2026 Agricultural and Environmental Law Conference. The conference will take place on Wednesday, October 28th at the Crowne Plaza in Annapolis. Click here to view the agenda.
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