The Maryland General Assembly has approved legislation postponing the rollout of the Family and Medical Leave Insurance (FAMLI) program, and updated dates have now been finalized.
While the timeline has shifted, the core structure of the program remains the same. Employers should take note of the revised deadlines so they can properly plan budgets, payroll changes, and policy updates.
What You Need to Know
Who Is Covered
All employers with at least one employee working in Maryland are covered, regardless of company location.
Employer Contribution Requirements
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Employers with 15 or more employees must pay the employer portion of contributions.
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Employers with fewer than 15 employees are exempt from employer contributions but must still withhold and remit employee contributions.
The Maryland Department of Labor will determine employer size each quarter based on wage reports.
New Timeline
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Payroll contributions begin: January 1, 2027
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Total contribution rate: 0.9% of wages (up to the Social Security wage base), split evenly between employees and employers (employers only if they have 15+ employees)
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Employee benefits become available: January 3, 2028
The state will announce updated contribution rates by May 1, 2026 for the 2027 plan year. After that, rates will be published annually every November.
What You Need to Do Now
Although contributions do not begin until 2027, preparation should start well before then.
Beginning January 1, 2027, employers will be responsible for:
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Withholding contributions from employee wages
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Adding the employer share, if applicable
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Remitting total contributions quarterly
Payroll systems will need to be updated to ensure deductions begin seamlessly. Employers who owe an employer share should prepare to budget for quarterly remittances.
It is also wise to begin reviewing your organization’s leave policies now. Starting in 2028, eligible employees may access up to 12 weeks of paid family and medical leave, with the possibility of an additional 12 weeks in certain circumstances.
Existing PTO, parental leave, disability, and related programs may need to be aligned or clarified so employees understand how FAMLI integrates with current benefits.
Extended paid leave could also affect staffing, scheduling, and coverage planning, particularly in departments with specialized roles.
Private Plan Considerations
Maryland allows employers to use equivalent private insurance plans that meet or exceed state benefits.
Updated regulations provide new clarity on what those plans must include and how they must be administered. Employers may want to evaluate whether an approved private plan could be a better fit for their workforce.
Unity Insurance can assist in reviewing private plan options and determining whether they align with your organization’s financial and operational goals.
Employers who choose to cover the full contribution amount on behalf of employees should consult with tax professionals regarding potential tax implications.
What’s Next
Even with the delay, FAMLI is coming. Employers have a valuable window of time to prepare.
Updating payroll processes, reviewing internal policies, evaluating private plan options, and anticipating workforce impacts now will help ensure a smooth transition when the program officially launches.
For official guidance and program updates, visit the Maryland Department of Labor at:
https://paidleave.maryland.gov/employers
You may also contact the Department at (410) 525-4010 or .