Maryland Paid Family and Medical Leave (FAMLI)

Maryland Family and Medical Leave Insurance (FAMLI) is a state-mandated program that ensures eligible Maryland workers can take up to 12 weeks off from work to care for themselves or a family member and still receive up to $1000 a week in income.

Employees are eligible to begin receiving PFML benefits starting January 1, 2028.

Any person or entity that employs at least one person in the state of Maryland must offer PFML benefits to comply with Maryland law.

An eligible employee is defined as someone who has worked at least 680 hours in the state of Maryland over the four most recent quarters, immediately prior to the leave start date. This definition of employee includes part time and seasonal workers. An employee does not have to work 680 hours for the same company to qualify, as long as they have met the 680 hours criteria in the state of Maryland over the prior four quarters.

Under MD PFML, an employee can take up to 12 weeks of PFML leave for the following reasons:

• Own medical care
• Care of a Qualified Family Member
  
  • Qualified Family Members include spouse, child, parent, parent-in-law, sibling or step-sibling, grandparent, grandparent-in-law, grandchild, and domestic partner.
• Bonding with a new child
  
  • NOTE: An additional 12 weeks of benefits for bonding are available to an employee who has a serious health condition in the same benefit period in which they have a child.
• Care of a service member
• Military qualifying exigency

MD PFML is designed to be a shared contribution plan with employers contributing 50% of the premium and employees contributing 50% of the premium.

Under the state administered PFML plan, the total contribution rate will be 0.90% of total payroll (up to the SSA Wage Cap of $184,500 in 2026), equally split between employer and employees. Note, the state has the ability to adjust the total contribution rate on a yearly basis. Under current legislation, the maximum increase is 0.30%.

For organizations with 14 or fewer employees, employers are not required to contribute, and the total contribution rate will be 0.45%.

When do contributions to the state-administered plan begin?

While employees are not eligible for PFML benefits until January 1, 2028, all employers (and their employees) who opt in to the state administered plan must start making full contributions beginning January 1, 2027, to prefund the program. Contributions to the state are due and payable on a quarterly basis.

Are there alternatives to the state-administered plan?

Yes, there are fully compliant alternative PFML vehicles available through the private market (disability carriers) and through self-funded options.

For employers with 14 or fewer employees, it is advisable to strongly consider utilizing the state program. Most private options are not available to groups with less than 15 employees.

You must have 50 or more employees to self-fund PFML.

For groups with 15 or more employees, it is advisable that the group should at the very least consider utilizing a private PFML plan. There are a number of advantages to the private plan option.

• Those companies who utilize the private plan option will be exempt from participating in the state plan prefunding period (January 1, 2027- December 31, 2027). This will save both the employer and employee a year’s worth of premiums.
• Those who opt to utilize a private plan option from a carrier who also supports their other leave coverage lines (i.e. FMLA, PFML, STD, & LTD) will enjoy ease of administration and integration for all leave policies. Having a single point of contact for all leave policies along with reporting, status updates, and compliance support is a major advantage of the private option over the state administered program.
• The private plan option will likely be a superior claims experience for both employers and employees. In other states where PFML has been in place for several years, the state administered program averages between 12-15 weeks for claims adjudication and processing. The private plan option in those same states adjudicate and process claims in 3-5 days.

The potential disadvantage of the private plan option is that groups will be rated based on their individual risk and demographics which could result in a higher contribution rate. It is important to note that if the private plan rate is higher than the state rate of 0.90%, employees can still only pay 0.45% contribution share, meaning that the employer would have to cover the difference.

Choosing to opt out of the state plan will be the right choice for many groups. In order to avoid pre-funding requirements, groups wishing to opt out must adhere to the timeframe below:

Timeline for January 1, 2027 Contribution Exemption

Q4 2026: Declaration of Intent (DOI) submission period for January 1, 2027 contribution exemptions. This will be a form groups must complete with the state, along with the payment of the exemption fee ($100-$1000 depending on size of the group). More details to follow once final regulations released by Q2 2026.

Q4 2026: DOI must be approved by this date for January 1, 2027 contribution exemption.

January 1, 2027: Contribution deductions begin for state plan participants and those without an approved DOI. Contribution exemption effective date for employers with an approved DOI.

Q1 2027: Self-insured application timeframe (application submission to be approved for January 1, 2028 effective date).

Q1 2027: Fully insured application timeframe (application submission to be approved for January 1, 2028 effective date).

January 1, 2028: Program goes live, and benefits become payable.

NOTE: If an employer fails to collect premiums from employees for a given period, the employer is responsible for 100% of the premium. They cannot retroactively charge back employees for their portion of premium.

Employers will be responsible for filing quarterly wage and hour reports with the Division. These reports will be the basis for calculating the amount due each quarter. Employers will be required to file these reports, even if they participate in a private plan. The Division will share sample reporting templates.

FAMLI and FMLA are similar in many ways. The biggest difference is that FAMLI offers paid time off, while FMLA ensures workers have access to unpaid time off. Also, FAMLI’s eligibility rules include more workers and the self-employed. When an event qualifies for leave through both FMLA and FAMLI, the leaves should run at the same time. There will be limited cases when an event only qualifies for FAMLI. In that case, an individual does not use any FMLA time while taking FAMLI.

Employers will be required to notify workers about paid family and medical leave:

• starting July 2027 (six months before benefits begin)
• when the worker is hired
• once a year
• when the worker requests paid leave
• when an employer knows that a worker’s leave request may qualify