Maryland FAMLI Update: What Employers Should Know About State Plan and Private Plan Options
Maryland’s Family and Medical Leave Insurance program, better known as FAMLI, is closer than many employers may realize.
While the contribution kickoff isn’t until January 1, 2027, and benefits will not start until January 2028, it's important to start preparing now for the changes ahead.
Here’s the key takeaway: If your business has at least one employee working in Maryland, FAMLI needs to be on your radar.
What Is the Latest Maryland FAMLI Update for Employers?
Employers will have more than one way to comply with Maryland FAMLI:
Register directly with Maryland FAMLI and participate in the State Plan, or
Work with their broker or insurance provider to explore an approved private plan
Private plans include:
Commercial insurance plans, or
Self-insured private plans
For employers, this is an important planning piece. The path you choose may affect future budgets, payroll deductions, reporting, benefits strategy, and employee communications.
What Does Maryland FAMLI Provide?
Maryland FAMLIis the state’s paid, family and medical leave program.
It will provide eligible employees up to 12 weeks of paid, job-protected leave, with benefits of up to $1,000 per week, for reasons such as:
Welcoming a new child
Caring for their own serious health condition
Caring for a family member with a serious health condition
Managing certain needs related to a family member’s military deployment
Caring for a covered service member
Who Is Eligible for Maryland FAMLI?
Any employee who’s logged at least680 hours in a Maryland-based position over the past year can be eligible.
2 Things to Consider:
Coverage is based on where the work is performed, which means remote employees working from Maryland also need to be considered.
Independent contractors and federal government employees are not covered.
How Employers Can Get FAMLI-Ready
While you do not need to make every decision immediately, you should begin preparing. FAMLI will bring new responsibilities for employers with Maryland workers, and early planning can help make the transition smoother.
1. Confirm Maryland Employee Coverage
Identify how many employees are working in Maryland, including remote employees. Then determine whether your business meets the 15-employee threshold for employer contributions.
2. Evaluate Your Compliance Game Plan
Decide whether Maryland’s State Plan or an approved private plan may be the better fit for your business. Employers interested in a private plan should begin conversations with their broker or insurance provider early.
3. Prepare Payroll
Connect with your payroll provider to confirm readiness for FAMLI deductions, employer contributions, and quarterly wage and hour reporting.
If you have 15+ employees: You can deduct up to 0.45% of wages from your employees’ paychecks (50% of the total rate), with you, the employer, covering the remaining 0.45%.
Employers can choose to pay an employee’s share as a voluntary benefit, covering the full premium.
If you have fewer than 15 employees: Your employees may be responsible for covering up to 100% of the premium through payroll deductions.
4. Review Current Leave Policies
Review current leave policies to understand how FAMLI may interact with PTO, parental leave, short-term disability, Maryland Paid Sick Leave, and FMLA.
5. Keep Your Team in the Loop
Transparency is Key. Plan how you’ll communicate FAMLI changes before payroll deductions begin. Consider setting reminders to update your employees during key events such as:
6 months before it starts (July 2027)
At the time of hire
Annually
When a worker requests leave
Whenever you become aware that a worker’s leave may qualify
FAQs
When does FAMLI start?
Maryland’s current FAMLI timeline is:
January 1, 2027: Payroll contributions begin
April 2027: First quarterly wage and hour reports and contribution payments begin
July 2027: Employer notice requirements begin
January 2028: Employee benefits become available
What is the Maryland FAMLI contribution rate?
For 2027, the total Maryland FAMLI contribution rate is 0.9% of covered wages.
For employers with 15 or more employees, the contribution is generally split between the employer and employee.
Do small employers have to pay the employer share?
Employers with fewer than 15 employees are generally not required to pay the employer share. Employees may still contribute through payroll deductions.
What are the Maryland FAMLI reporting requirements?
Employers will need to submit quarterly wage and hour reports to Maryland FAMLI. These reports help determine contribution amounts, employee eligibility, and benefit calculations.
Employers with approved private plans should still expect reporting obligations.
Does Maryland FAMLI replace FMLA?
No. Maryland FAMLI does not replace FMLA. FAMLI provides paid leave, while FMLA provides unpaid job-protected leave. In some situations, both programs may apply at the same time.
What is the difference between FAMLI, FMLA, and Maryland Paid Sick Leave?
Maryland FAMLI: provides paid, job-protected leave for qualifying family and medical reasons. It is funded through employer and employee contributions.
Federal FMLA: provides unpaid, job-protected leave for certain family and medical reasons. It generally applies to employers with 50 or more employees.
Maryland Paid Sick Leave: covers shorter-term needs, such as a cold.
In some cases, more than one leave law may apply at the same time.
How Can MVB Help Employers Prepare for FAMLI?
MVB’s HR team will work with you and your respective brokers as you evaluate Maryland FAMLI options. Our team of experts can help you think through how this change may affect payroll planning, employee communication, budgeting, and benefits strategy.