Effective January 1, 2027, Maryland’s Family and Medical Leave Insurance (FAMLI) program will begin paying benefits to eligible workers. Created by the Time to Care Act, FAMLI establishes a statewide wage replacement benefit funded through payroll contributions. Employers with any Maryland-based employees should begin planning now.
What FAMLI Is—and How It Fits with Other Leave Benefits
FAMLI is a state-administered program that provides partial wage replacement when an eligible employee takes leave for qualifying family or medical reasons for up to 12 weeks within a 12-month period. FAMLI operates much like unemployment insurance; it is funded through payroll contributions collected from employers and employees, with the state administering the fund, evaluating claims, and paying benefits directly to eligible workers.
FAMLI pays up to 90% of an employee’s weekly wages, up to a maximum of $1,000 per week, and provides job protection. The $1,000 cap applies through December 31, 2028, and is then updated annually.
FAMLI can run concurrently with other leave where permitted (e.g., federal FMLA, employer-paid parental leave) and can coordinate with accrued PTO in accordance with state rules and employer policy. For example, employers may agree to permit employees to use accrued leave to “top off” their FAMLI benefit up to 100% of the employee’s regular wage. Employers may maintain separate paid benefits, but FAMLI benefits are administered by the state.
Who is Covered and Eligible?
Employees will be eligible for benefits after working at least 680 hours in a role in Maryland in the 4 calendar quarters before they file a claim or their leave begins. Employees can apply for benefits 60 days before or after the first date of leave needed for a qualifying event.
Qualifying events include: bonding with a new child, the employee’s own serious health condition, caring for a family member with a serious health condition, and certain military-related exigencies or caregiving.
Contributions
FAMLI is funded through mandatory payroll contributions split between the employer and the employee. Employers with fewer than 15 employees do not owe the employer share but must still withhold and remit the employee share. Employers are responsible for timely withholding from employee wages, remitting both shares as applicable, and complying with state-defined contribution rates and any wage base. Rates and wage base thresholds are set by the state and may be adjusted annually.
What Employers Need to Know
- Registration: Employers must register online starting in Fall 2026. When registering, employers must designate an authorized officer who is legally permitted to act on behalf of the company.
- Contributions: Contributions begin January 1, 2027 for employers with 15 or more employees. The total contribution rate is 0.9%, split equally between the employer and employee. On November 1 of each year, the Secretary of the Department of Labor will set the contribution rate for the next year.
- Notification: Employers must notify employees of their FAMLI rights beginning July 2027, at hire, annually, and whenever leave is requested. Written notice of any contribution change is required at least one pay period in advance.
- Quarterly Reporting: Beginning in April 2027, employers must submit quarterly wage and hour reports to the FAMLI division, even if you participate in a private plan. Employers must report gross wages to help determine employee eligibility and benefit amounts.
If you have any questions about the implementation of Maryland’s Family and Medical Leave Insurance program, please contact the authors or your regular Saul Ewing employment attorneys.
