Maryland Paid Family and Medical Leave Insurance: What Employers Should Know

Starting in the spring of 2025, employers who pay a wage or salary to at least one person who works in Maryland must register to participate in the state’s new paid family and medical leave insurance (FAMLI) program. Eligible workers can receive job-protected leave and partial wage replacement while on qualifying leave.

Participating employers begin payroll deduction contributions on July 1, 2025, then remit their first payment to the state in October 2025. The state will begin providing FAMLI benefits starting July 1, 2026. Employers can elect to opt out of the state plan if they apply and are approved by the Maryland Department of Labor to use a private or self-insured plan.

How Is the Maryland FAMLI Program Funded?

The Maryland FAMLI program is funded by contributions from employees and employers with contribution requirements based on the number of employees on payroll. The state DOL sets the contribution rate and will announce it ahead of the state fiscal year (July 1 to June 30). The contribution rates currently are as follows for businesses:

• Fewer than 15 employees: The rate is 0.45% of covered wages up to the social security cap, and employers may withhold the full amount from employees’ wages.
• 15 or more employees: The rate is 0.90% of covered wages up to the Social Security cap. Employers are allowed to withhold up to half (0.45%) from employee wages.

Only individuals performing work in Maryland can participate in the program and must contribute to the fund. So, if a business in Maryland has workers that do not work in Maryland, those out-of-state workers would not have to contribute nor would they be eligible to receive benefits.

Who Is Eligible for Maryland Paid Leave Under FAMLI?

Any worker who receives wages for work done in Maryland will eligible for benefits under the Maryland FAMLI program if they work at least 680 hours in the four calendar quarters prior to taking leave. Under the law, part-time and seasonal workers are eligible if they meet the eligibility requirements.

What Are Qualifying Events for Paid Leave Under MD FAMLI?

Paid leave in Maryland under the FAMLI program can be taken by covered individuals for certain qualifying events, including:

• Caring for themselves if they have a serious health condition
• Taking care of a family member with has a serious health condition
• Welcoming a new child into their home, including through adoption or foster care
• Making arrangements for a family member’s military deployment

What Are the Benefits Under Maryland FAMLI?

Eligible workers may take up to 12 weeks of paid leave during a 12-month period under the FAMLI program and receive up to $1,000 per week in wage replacement. An employee might be eligible for up to 24 weeks in a single 12-month period due to multiple qualifying events (e.g., caring for their own serious health condition and welcoming a new child).

Individuals taking leave may take leave on an intermittent basis. The employer and the individual should agree on a schedule for intermittent leave.

Are There Reporting Requirements for MD FAMLI?

To help the Maryland FAMLI program determine contribution amounts, employers must submit quarterly wage and hour reports. The FAMLI Division will then calculate for each employer the amount due each quarter.

Is There a Private Plan Exemption to MD FAMLI?

Businesses may have the ability to opt out of the Maryland FAMLI program. The FAMLI Division is expected to have a process in place by May 2025 that allows businesses to start a Declaration of Intent to notify the state of its intent to offer a private plan.

Any employer whose DOI is accepted will not have to contribute to the FAMLI program during the approved DOI period.

Employers who opt out of the FAMLI program must instead offer a plan through an insurance carrier or a self-insured plan with benefits that are equal to or greater than those provided under the Maryland FAMLI program.

Looking Forward

Businesses that elect a private plan or self-insured plan that is more beneficial to workers than the state offering could be helping enhance their recruitment and retention efforts, but employers should ensure full compliance. Paychex also offers HR Services to support businesses.