Maryland Jumps on the Paid Family Leave Bandwagon

Maryland will soon join nine other states and the District of Columbia in requiring paid family and medical leave for employees. The bill establishing the requirement (referred to as the “Time to Care Act”) was originally vetoed by Governor Hogan, but members of the Maryland General Assembly recently overrode the veto to pass the bill into law.

The Time to Care Act creates a Family and Medical Leave Insurance Program (FAMLI) beginning in October 2023. FAMLI applies to employers with one or more employee and provides up to 12 weeks of paid leave to:

  • Care for a family member with a serious health condition

  • The individual’s own serious health condition

  • Care for a newborn child, a child newly placed for adoption, foster care or kinship care

  • Dealing with military deployment

To be eligible for leave, an employer must have worked at least 680 hours over the 12-month period immediately preceding the date on which the leave is to begin.

How Will the Leave be Funded?

All employees will contribute to the fund, and employers with 15 or more employees will also contribute. The contribution rates will be set by June 2023 before an initial effective period from October 1, 2023 through December 31, 2025. Prior to the end of this period, the state will perform a cost analysis of the program to determine the contribution rates going forward.

What Paid Leave Compensation is Available?

Effective January 1, 2025 employees who take leave will receive a benefit dependent on how the individual’s average weekly wage compares to the State average weekly wage. The minimum benefit is $50, and the maximum benefit is expected to be $1,000 for 2025. The weekly benefit will index annually.

Can Employers Waive Participation in the State Plan?

Employers who provide a benefit that is equal or better than what is required under FAMLI will be able to file their plan with the Maryland Department of Labor (MDL) for approval. If an exemption is granted, the employer and its employees will be exempt from the bill’s required contributions.

**What are the Notification Requirements? **

Employers will need to provide written notice to each employee of their rights and duties under the bill at the time of hire, and annually thereafter. Standard notices will be developed and provided by the MDL.

**What are the Penalties for Failure to Comply? **

Employers will be subject to a civil penalty of up to $1,000 for each occurrence if the employer willfully makes a false statement or fails to report a material fact regarding an employee’s claim for benefits.

Individuals will be disqualified from receiving benefits for one year if they make a false statement or misrepresentation.

**What Should Employers do Now? **

There is no immediate action necessary. As with any new law, the state will release more information and administrative guidance as they move towards the effective date.

**Are There any Other State Leave Programs on the Horizon? **

Not to be outdone by its neighbor, Virginia is exploring a voluntary insured leave benefits provided through life insurance companies. Under the proposal currently being considered, employers would be able to voluntarily purchase these benefits for their employees.

The Author
Karen Hooper

VP, Senior Compliance Manager

Karen Hooper, CEBS, CMS, Fellow, is a Vice President and Senior Compliance Manager working closely with the Lead Benefit Counsel in Newfront's Employee Benefits division. She works closely with internal staff and clients regarding compliance issues, providing information, education and training.

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