Maryland employers should begin preparing for the implementation of Maryland’s Family and Medical Leave Insurance (“FAMLI”) program. Although employees will not be eligible to receive paid leave benefits until January 3, 2028, employers face important compliance obligations beginning much sooner, including payroll contribution, registration, notice and recordkeeping requirements.

The Maryland Department of Labor has finalized regulations implementing the program, and employers should use the coming months to review leave policies, coordinate with payroll providers, budget for payroll contributions, and determine whether participation in the State-administered plan or an approved private plan best meets their organization’s needs.

Key Takeaways

• Payroll contributions begin January 1, 2027.

• Employees may begin receiving FAMLI benefits on January 3, 2028.

• Eligible employees generally may receive up to 12 weeks of paid leave (up to 24 weeks in limited circumstances) and currently up to $1,000 per week in benefits.

• Employers should begin preparing now by reviewing leave policies, payroll systems, employee communications, and whether an approved private plan is appropriate.

• If you have at least one employee in Maryland, you will be required to register online at http://paidleave.maryland.gov. Registration opens in Fall 2026 and there are no exceptions to registration.  

Overview of the Program

The FAMLI program establishes a statewide paid family and medical leave insurance program administered by the Maryland Department of Labor. The program provides eligible employees with partial wage replacement while taking leave for certain qualifying family and medical reasons, including:

• The birth, adoption, or foster placement of a child;

• Bonding with a new child;

• The employee’s own serious health condition;

• Caring for a family member with a serious health condition; and

• Certain qualifying military-related circumstances.

The FAMLI Program applies to employers with one or more employees working in Maryland. While employers with fewer than 15 employees are not required to pay the employer share of payroll contributions, they must withhold and remit employee contributions and otherwise comply with applicable program requirements. Employees are generally eligible for benefits if they have worked at least 680 hours over the four most recently completed calendar quarters before the leave begins. Employees can apply for benefits 60 days before or after the first date of leave needed for a qualifying event.

The program provides eligible employees with up to 12 weeks of paid leave during a benefit year. Employees who use parental leave and later experience a serious health condition in the same year may be eligible for an additional 12 weeks, for a maximum of 24 weeks of paid leave.

In some cases, FAMLI leave will run concurrently with leave provided under the federal Family and Medical Leave Act (“FMLA”), allowing eligible employees to receive partial wage replacement while taking otherwise unpaid, job-protected leave.

Benefits and Funding

FAMLI benefits are based on an employee’s average weekly wage using a statutory formula designed to replace a higher percentage of wages for lower-income employees. The current maximum weekly benefit is $1,000, although that amount is subject to periodic adjustment by the Maryland Department of Labor.

Beginning January 1, 2027, employers must begin withholding employee payroll contributions and remitting required contributions to the State unless they participate in an approved private plan.

For calendar year 2027, the total contribution rate is 0.90% of covered wages up to the Social Security cap:

• Employers with 15 or more employees generally share the contribution equally with employees (0.45% each), although employers may elect to pay a greater share.

• Although employers with fewer than 15 employees generally are not required to pay the employer share of payroll contributions, they remain subject to many of the program's other requirements, including withholding and remitting employee contributions (0.45%) and employers may elect to pay the employee share of payroll contributions.

Employers that already provide paid parental leave or disability benefits should evaluate whether an approved private plan may provide a better option than participation in the State Plan.

Key Dates

Date | Employer Action

September 1 – November 15, 2026

Employers seeking an approved private plan generally must submit a Declaration of Intent

Fall 2026

Employers must register online at: http://paidleave.maryland.gov

January 1, 2027

Payroll contributions begin

July 2027

Employee notification requirements begin

January 3, 2028

Employees may begin receiving FAMLI benefits

What Employers Should Do Now

Although the first payroll contributions are still several months away, employers should begin preparing now. In particular, employers should:

• Review employee handbooks and leave policies

• Evaluate how FAMLI will interact with existing PTO, paid parental leave, disability, and FMLA policies

• Coordinate payroll system updates with payroll providers

• Budget for employer payroll contributions

• Determine whether participation in the State Plan or an approved private plan best fits the organization

• Prepare employee communications regarding payroll deductions and available benefits (you will need to notify employees about paid family and medical leave at specific times throughout their employment, beginning in July 2027)

• Continue monitoring guidance issued by the Maryland Department of Labor as implementation continues

You can obtain additional information at: https://paidleave.maryland.gov. If you have questions regarding the FAMLI program or how it may affect your business, please do not hesitate to contact us.

THIS CLIENT ALERT IS INTENDED TO PROVIDE GENERAL INFORMATION REGARDING MARYLAND’S FAMILY AND MEDICAL LEAVE INSURANCE PROGRAM. IT IS NOT INTENDED TO CONSTITUTE LEGAL ADVICE FOR ANY SPECIFIC SITUATION.