Although employees will not be able to access FAMLI benefits until January 2028, employer compliance obligations are already underway.

FAMLI benefits will provide eligible Maryland employees with 12 weeks of paid, job-protected leave to welcome a new child, tend to their own serious health condition, care for a loved one with a serious health condition, or manage urgent family needs related to military deployment. Eligible employees may receive benefits of up to $1,000 per week while on leave. These benefits are paid through the state or a state-approved private plan and funded through the contributions described below.

Employers with employees working in Maryland must act now to register with FAMLI, determine whether they will use the state or private plan, and make plans to begin contributions effective January 1.

Coverage

Employees will be eligible for benefits if they have worked in Maryland for at least 680 hours in the four calendar quarters preceding the date they file a claim or their leave begins.

Registration

Employers that have at least one employee in Maryland must register with the Maryland Family and Medical Leave Insurance (FAMLI) program at paidleave.maryland.gov/register/. Registration is now open and must be completed by a person legally permitted to act in an official capacity on behalf of the employer (the “Authorized Officer”).

As part of the registration process, the Authorized Officer must verify their identity and provide the following information:

• Employer Identification Number (EIN)
• Legal name of the employer and “doing business as” (d/b/a) name
• NAICS code
• Physical business address
• Mailing address (if different from physical address)
• Business email address (distinct from the Authorized Officer’s email address)

Once registered, an employer may use a third-party agent to manage FAMLI- related responsibilities, including submitting quarterly reports, remitting contributions, and responding to claims.

Contribution

The Maryland Department of Labor has established a total contribution rate of 0.9% of compensation after taxes, divided equally between employers and employees at 0.45% each. Employers with fewer than 15 employees are not required to pay the employer portion of the contribution, but must withhold and remit the employee’s 0.45% share. Employers may voluntarily elect to cover employees’ 0.45% share (“employer pick-up”), but doing so may have tax implications. The IRS has indicated that these employer pick-up contributions are treated as taxable wages for the employee and are subject to applicable federal taxes.

Employer size for purposes of determining whether an employer has fewer than 15 employees will be determined quarterly, and all employees of the entity will be counted, regardless of whether they work in Maryland or elsewhere.

Starting January 2027, employers must begin collecting employee contributions through payroll deductions. Employers must then remit contributions electronically each quarter, beginning in April 2027. Failure to submit timely contributions may result in penalties and interest.

Private Plans

Employers have the option to forego participation in the State Plan, that is, the plan by which FAMLI benefits are paid by the State of Maryland, and may apply to use a FAMLI Division-approved private plan. Private plans may be either fully insured commercial plans or self-insured plans, but they must provide benefits and services that are at least as favorable as those available under the State Plan.

Self-insured plans are generally limited to employers with 50 or more employees. However, employers with fewer than 50 employees may utilize a self-insured plan if they had an FAMLI-comparable plan in place as of July 31, 2026.

Employers who would like to apply to use a private plan and wish to be exempt from contributions to the State Plan during the initial seeding period (January 1, 2027-December 31, 2027) must submit a Declaration of Intent (DOI) between September 1 and November 15, 2026.

During the seeding period, employers with an accepted DOI must begin withholding from employee pay effective January 1, 2027, and hold all contributions that would be due to the FAMLI fund if they are not authorized to proceed with a private plan in an escrow account.

Those with an accepted DOI still need to apply to use a private plan. Private plan applications will be available in summer 2027 and must be submitted by October 1, 2027. Employers approved to proceed with a private plan are not required to remit contributions to the State.

For approved self-insured private plans, contributions may be used to fund a separate account used solely for FAMLI benefits. If approved to use a commercial private plan, the employer must return any contributions held in escrow to the employees. If an employer’s application to use a private plan is denied or the employer decides to use the State Plan, the contributions held in escrow will be owed to the State.

Quarterly Reports

Beginning in April 2027, all employers must electronically submit Quarterly Wage and Hour Reports (QWHRs) to the FAMLI Division.This reporting requirement continues even if an employer is approved to use a private plan.

The FAMLI Division will use these reports to determine employee eligibility and benefit amounts based on the number of hours that each employee works. For employers participating in the State Plan, the reports are also used to calculate the quarterly contribution amounts, determine employer size, and to assess eligibility for a reduced contribution rate.

The first Quarterly Wage and Hour Report, covering the period January 1 through March 3, 2027, is due on April 15, 2027.

Notice Requirements

Employers must provide FAMLI notices to employees at several key points, including:

• Six months before benefits become available, that is, by July 1, 2027
• Upon hire
• Annually
• One pay period before payroll deductions begin
• 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

The FAMLI Division of the Maryland Department of Labor has indicated it will create sample notices for employers.

Employer Takeaway

The time to start preparing for Maryland’s FAMLI program is now. Before the end of 2026, employers with at least one employee working in Maryland must:

• Register with the FAMLI program;
• Evaluate whether it makes sense to engage a third-party vendor to manage FAMLI-related tasks;
• Decide whether to cover employees’ 0.45% share and assess any tax implications associated with doing so. Employers that decide to withhold the employee portion must provide notice in December 2026, at least one pay period prior to beginning deductions on January 1, 2027;
• Consider whether participation in the State Plan or a FAMLI-approved private plan best aligns with their operational and workforce needs. The deadline for submission of a Declaration of Intent to use a private plan is November 15, 2026.

This proactive planning will help employers avoid compliance issues and facilitate a smoother transition when contributions start in January 2027 and employee benefits become available in January 2028. For additional resources, review the Maryland FAMLI Employer Resources page at https://paidleave.maryland.gov/employers/ and Frequently Asked Questions about FAMLI at https://paidleave.maryland.gov/files/famli-faqs-april-2026.pdf.