Maryland is preparing to implement its Family and Medical Leave Insurance (FAMLI) program, which will provide eligible employees with paid leave for certain medical, family, and military-related needs. While benefits will not become available until January 2028, as an employer, you will have responsibilities beginning sooner, including registration, payroll withholding, reporting, and contributions. With payroll withholding set to begin in January 2027, employers should understand the FAMLI program now and begin preparing their payroll, HR, and budgeting processes for the upcoming requirements. Here’s what you need to know about FAMLI as a Maryland employer.
What is FAMLI?
To begin, the Maryland Family and Medical Leave Insurance (FAMLI) program is a statewide paid leave program designed to provide employees with paid time off, job protection, and income replacement during qualifying life events. Beginning in January 2028, eligible workers may receive up to $1,000 per week for up to 12 weeks of leave, either continuously or intermittently. These qualifying events include:
- Welcoming a new child,
- Caring for an employee’s own serious health condition,
- Caring for a family member with a serious health condition, and
- Addressing needs related to a family member’s military deployment.
It is important to note that FAMLI uses a broad definition of “family member.” Covered relationships include children, parents, spouses, domestic partners, siblings, grandparents, grandchildren, legal guardians, wards, and certain in-law relationships. Depending on the relationship, the definition may also include biological, adopted, foster, and stepfamily members.
How the program works
The FAMLI program follows six primary steps:
- Employee contributions are withheld through payroll.
- Employers submit quarterly wage and hour reports.
- Employers remit both employee and employer contributions.
- Employees file claims when a qualifying event occurs.
- FAMLI verifies eligibility using reported wages and hours.
- Eligible employees receive benefits directly through the program.
To qualify for FAMLI, employees generally must have worked at least 680 hours in Maryland-covered employment during the previous four reported calendar quarters. The exact time off that is approved will depend on the individual and their circumstances. It’s also important to note that in certain situations where, for example, an employee experiences a serious health condition and welcomes a child in the same year, the individual may be eligible for up to 12 weeks per event, for a total of 24 weeks.
Equally important to note is that where an individual lives and works matters when it comes to FAMLI eligibility. Work must be “localized” in Maryland for a worker to be eligible. Localization refers to where the work is physically performed, not where a worker lives. This means that if an individual lives in Maryland, but works full-time in Pennsylvania, they would not be covered. However, if an individual lives in Pennsylvania, but works full-time in Maryland, they would be covered. There are similar rules for remote employees, too.
Registration requirements
Every employer with at least one Maryland employee must register for FAMLI. There are no exemptions under state law. Registration occurs through Maryland’s dedicated FAMLI system, and registration with other State agencies will not transfer. Registration must be completed by an Authorized Officer from your business, such as:
- Owners,
- Partners,
- Executive Directors,
- C-Suite officers, or
- Other individuals with legal authority to act on behalf of the employer.
After registration, additional team members may be added to the employer profile. It is also important to note that if your business works with Third-Party Agents, such as CPAs, payroll administrators, or benefits administrators, they cannot register you for FAMLI. However, after registration is complete, a TPA can send an invitation to your business to sign a Power of Attorney and connect accounts. Afterward, TPAs can manage FAMLI tasks for you, such as submitting the quarterly reports and responding to claims.
Understanding contributions
Maryland Labor announced a 0.9% contribution rate for wages paid during 2027. The contribution can be split equally between employees and employers, with each paying 0.45%. Employers may choose to pay the entire contribution amount on behalf of employees, although the potential tax implications should be considered before doing so.
Small employers with fewer than 15 total employees are exempt from paying the employer portion of contributions, although they must still provide program coverage to their employees. For the first year, employer size will be determined quarterly, then will be determined annually afterward, which means that if a business’s headcount grows, they will have to begin paying the employer portion for FAMLI.
Private plan options
Employers will automatically participate in the State Plan upon registration unless they pursue an approved private plan. Under the State Plan, Maryland will collect contributions, process claims, and pay benefits.
Employers that prefer a commercial or self-insured private plan may seek approval, provided the private plan offers benefits and protections equal to or better than the State Plan and comply with the insurance code. Employers seeking exemption from contributions during the seeding period must submit a Declaration of Intent between September 1 and November 15, 2026.
Important dates to note
Although benefits are not set to begin until the beginning of 2028, employers must begin preparations well before then. Here are a few of the key dates to note between now and then for those who will participate in the State Plan:
- Employer and third-party agents (TPA) registration: Available now
- Contributions begin: January 2027
- First quarterly wage and hour reports and contribution payments: April 2027
- Employee benefits become available: January 2028
For those seeking to participate in a private plan, these are the important dates to note:
- Registration and Declaration of Intent: September 1 – November 15, 2026
- Begin keeping contributions in escrow account: January 2027
- First quarterly wage and hour reports: April 2027
- Apply for private plans: Summer 2027
- Benefits begin: January 2028
This timeline and key deadlines should be shared with payroll, HR, and any other compliance teams.
What should MD employers do now?
Employers should begin preparing immediately by registering with Maryland FAMLI, and doing the following:
- Evaluating payroll system updates needed for withholding,
- Incorporating contribution costs into budgeting for 2027,
- Reviewing existing leave policies and benefits programs,
- Determining whether a private plan may be desirable, and
- Preparing employee notification procedures.
With withholding beginning in January 2027 and benefits launching in January 2028, organizations that prepare early will be best positioned to comply with the new requirements and support their workforce effectively.
Final thoughts
If you have any questions about Maryland FAMLI, its rules, or what to do next, our team is here to help. Please reach out to your Client Relationship Manager directly or contact us via the form on this page.
