The Maryland Department of Labor has finalized the rules implementing Maryland’s Family and Medical Leave Insurance program, commonly known as FAMLI. Payroll contributions are scheduled to begin January 1, 2027, and benefits will become available January 3, 2028.
When benefits become available, FAMLI will provide up to 12 weeks of job-protected paid leave annually, with benefits of up to $1,000 per week. FAMLI covers important life events such as welcoming a new child, managing a serious health condition, caring for a family member with a serious health condition, or addressing family needs related to a uniformed service member’s deployment.
Employers should begin preparing for implementation now. Immediate priorities include evaluating whether to participate in the state plan or pursue a private plan, preparing payroll systems for contributions, developing required employee notices, reviewing existing leave policies, and establishing procedures for administering FAMLI claims.
Important dates
- Fall 2026: Employers will be able to register online with the FAMLI Division and may begin submitting a Declaration of Intent to participate in a Private Plan
- November 15, 2026: Employers pursuing a private plan must submit the Declaration of Intent to the FAMLI Division
- December 2026: Employers intending to withhold employee contributions generally should provide written notice at least one pay period before withholding begins.
- January 1, 2027: Contributions begin
- January 3, 2028: Benefits become available
How is FAMLI funded?
Both employers and employees will contribute to FAMLI at a combined rate of 0.9% of wages paid, up to the Social Security wage base. Employers may withhold up to half the contribution rate (.45%) from employee paychecks with the employer responsible for the remaining contribution, depending on employer size.
Employers with fewer than 15 employees are not required to pay an employer contribution. They must, however, remit any employee contributions withheld from wages.
Employers that withhold employee contributions must provide notice at least one pay period before deductions begin. For deductions beginning January 1, 2027, notice should be provided in December 2026.
How are benefits paid?
Employees must apply for benefits through the plan covering their employment. This may be the state plan administered by the Maryland Department of Labor or an employer’s approved equivalent private insurance plan.
An approved equivalent private plan must:
- Cover all employees performing qualified employment; and
- Provide rights, protections, and benefits that meet or exceed those available under the state plan.
Employers who intend to use a private plan can avoid paying quarterly contributions to the State Plan in 2027. Private-plan participation is subject to additional requirements regarding contributions, escrowed funds and what happens if an employer later returns to the State Plan.
Employers considering a private plan should review the Maryland Department of Labor’s requirements and deadlines.
What you are required to do
If you have at least one employee in Maryland and pay Maryland Unemployment Insurance, you are required to register with the State of Maryland. There are no exceptions under state law.
You are also required to:
- Submit quarterly wage and hour reports electronically through paidleave.maryland.gov, beginning in April 2027.
- Remit contributions electronically every quarter, beginning in April 2027, unless you participate in an approved private plan.
- Hold your employee’s position, and continue your employees’ health benefits, while the employee is on FAMLI leave. The employee must return to the same or equivalent position.
- Notify your employees about paid family and medical leave at specific times throughout their employment.
The Maryland Department of Labor provides detailed guidance on registration, reporting and contributions.
When you must notify employees
All employers must provide notice:
- Starting July 2027 (six months before benefits become available)
- When an employee is hired
- Once per year (annual notice)
- When an employee requests leave using terms such as “paid family and medical leave,” “parental leave,” or “family leave,” or otherwise indicates they want to take FAMLI leave
- When the employer knows the employee is taking leave for a qualifying reason
Employers that collect employee contributions must provide notice at least one pay period before payroll deductions begin, which could be as early as December 2026.
What if I’m a small employer?
Employers with fewer than 15 employees are considered small employers.
Small employers are not required to pay the employer portion of FAMLI contributions, but they must remit any employee contributions withheld from wages. Other FAMLI requirements, including registration, reporting and employee notices, still apply.
What employers should do now
- Identify covered employees. Determine which employees perform covered employment in Maryland.
- Prepare payroll systems. Coordinate with payroll providers and internal teams for contributions scheduled to begin January 1, 2027.
- Evaluate plan options. Decide whether to participate in the state plan or pursue an approved private plan. Consult your current benefits provider.
- Calendar private-plan deadlines. Employers considering a private plan should note the September 1 and November 15, 2026, Declaration of Intent dates.
- Prepare employee communications. Develop the advance contribution notice and the required FAMLI leave-and-benefits notice.
- Review leave policies. Evaluate how FAMLI will interact with FMLA, parental leave, sick leave, vacation, and other employer-provided benefits.
- Establish claims procedures. Assign responsibility for responding to claim notices within five business days.
- Update handbooks and forms. Revise leave policies, request forms, and administrative procedures before benefits become available.
- Train managers and HR personnel. Ensure that individuals receiving leave requests can recognize requests that may qualify for FAMLI and route them appropriately.
What if I use a private plan?
If you apply for and are approved for a private plan, you will not remit contributions to the State, but you will still be required to submit wage and hour reports and claims data every quarter. You’ll also be required to keep the following records for at least 5 years:
- Applications submitted and outcomes (approved/denied)
- Benefits paid
- Reconsideration requests and outcomes
- Wage and hour reports
- Employee contributions received
For more information on private plan requirements, application deadlines and other details, visit the Maryland FAMLI private plan guidance.
After a Declaration of Intent (DOI)
Once your DOI is accepted, you’ll collect contributions starting in January 2027 but won’t remit them to the State. Instead, you must hold all contributions in an escrow account. You can collect contributions from your employees or self-fund the escrow account. (Note: There is a statutory exception to this requirement for certain governmental employers.)
Important: Private plans can charge employers more than the State Plan rate. However, you cannot withhold more from your employees than they would pay under the State Plan.
Employers who submit a DOI must apply to use a private plan by October 1, 2027. If an employer does not apply to use a private plan, they may face penalties and fees.
For detailed instructions on registration, private plans, reporting and other FAMLI requirements, employers should refer to the Maryland Department of Labor’s FAMLI resources.
How can Councilor Help Navigate Maryland FAMLI
Our team can help you understand the new requirements and how they may affect your payroll, leave policies and employee communications. Contact us to learn more.
