Maryland Family and Medical Leave Insurance (FAMLI): What Employers Need to Know

Summary:

• Employers in Maryland must register for the state’s Family and Medical Leave Insurance (FAMLI) program beginning in fall 2026, with payroll contributions starting January 1, 2027.
• Eligible employees will receive up to 12 weeks of paid, job-protected leave annually for serious health conditions, family care, parental bonding, and military-related arrangements starting January 3, 2028.
• Employers must budget for contribution costs, update payroll systems, revise leave policies, and prepare employee communications before January 1, 2027.

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Starting January 1, 2027, Maryland employers will begin contributing to the state’s new Family and Medical Leave Insurance (FAMLI) program. One year later, in January 2028, eligible employees will gain access to paid, job-protected leave. For firms with Maryland-based employees—regardless of size—preparation should begin now. 

Maryland paid leave insurance (FAMLI): What it covers and how it works 

Maryland’s FAMLI program will provide eligible employees with up to 12 weeks of paid, job-protected leave annually for qualifying life events. During this leave, employees can receive partial wage replacement, currently capped at $1,000 per week. The amount depends on their average weekly earnings relative to Maryland’s statewide average weekly wage. The maximum compensation is based on a formula tied to the state average weekly wage, with the benefit structured as 90% of earnings up to a specified threshold and 50% of earnings above that threshold.  

The program operates as a shared funding model, with contributions split between employers and employees through payroll deductions. 

Maryland FAMLI compliance requirements 

All Maryland employers are required to participate in FAMLI through the state plan or an approved private plan; there are no exemptions based on company size or industry. If you have even one employee working in Maryland, you must comply. This includes full-time, part-time, seasonal, and temporary employees, and employees can’t opt out of the program. 

Eligible employees are those who have worked at least 680 hours in Maryland-based positions during the four calendar quarters immediately preceding their leave request or the start of their leave, whichever comes first. Employees do not need to reside in Maryland; only their work must be localized in the state. 

FAMLI qualifying events: When employees can take paid leave 

Employees may use FAMLI for four qualifying situations: 

1. Their own serious health condition, including childbirth and pregnancy-related conditions 
2. Caring for a family member with a serious health condition 
3. Bonding with a newborn or newly placed child through birth, foster care, adoption, or kinship care arrangements (within the first year after birth or placement) 
4. Making arrangements related to a family member’s military deployment 

The law defines “family member” broadly to include spouses, domestic partners, children (biological, adopted, foster, step, and those for whom the employee has legal or physical custody), parents, grandparents, grandchildren, siblings, and individuals in loco parentis relationships. 

Most employees may take up to 12 weeks of leave per benefit year for any of these reasons. In limited circumstances, when an employee qualifies for both parental bonding leave and leave for their own serious health condition within the same benefit year, an additional 12 weeks becomes available, allowing a maximum of 24 weeks total. 

FAMLI contribution rates 

The FAMLI contribution rate for 2027 is 0.9% of covered wages, up to the Social Security wage base (adjusted annually). While unlikely, it’s important to note that this rate could change before 2027 begins. 

This rate is split as follows: 

For employers with 15 or more employees: The employer contributes 0.45%, and employees contribute 0.45%. Employers may withhold up to 50% of the employee contribution from paychecks or choose to cover the full amount on behalf of their workforce (though tax implications should be reviewed with a tax professional). 

For small employers with fewer than 15 employees: The employer is responsible for remitting only 0.45%—the employee’s share—and may withhold this amount from employees’ paychecks. Alternatively, the employer may choose to cover this cost themselves. The employer is not required to contribute an additional employer share. 

Example: An employer with 20 Maryland-based employees and a combined annual payroll of $1 million would contribute approximately $4,500 annually (0.45% × $1 million) starting in 2027. 

Important note: The contribution rate announced in September 2023 was 0.9%. However, the Maryland Department of Labor is required to announce an updated rate by May 1, 2026, for the 2027 period. Rates will be reviewed annually each November thereafter, with a statutory maximum of 1.2% of wages. 

Preparing for FAMLI’s January 2027 launch 

January 1, 2027: Payroll contributions begin, and employers start collecting FAMLI contributions through payroll deductions. The first payment to the state is due April 30, 2027, covering wages paid January 1 through March 31, 2027. 

Fall 2026 (September through November): Employer registration opens. All Maryland employers must register online at paidleave.maryland.gov using their federal Employer Identification Number (EIN). Registered employers are automatically enrolled in the State Plan unless they apply for a private plan alternative. 

July 2027 onward: Employee notifications about benefits must begin. Employers are required to provide formal notice to employees about their FAMLI rights and benefits. 

April 2027 onward: Quarterly wage and hour reports are due. Employers must electronically submit quarterly reports to the FAMLI Division that show gross wages and hours worked for all Maryland-based employees (full-time, part-time, seasonal, interns, etc.). These reports are used to determine employee eligibility and benefit amounts. Contributions are also remitted quarterly, with payments due on the last day of the month following each quarter. 

January 3, 2028: Benefits become available, and eligible employees may begin taking paid leave and receiving benefits. 

Next steps for Maryland employers 

The FAMLI program represents a significant compliance and budgeting shift for Maryland employers. The state will release additional guidance, sample notices, and registration tools throughout 2026. Signing up for email updates will help you stay informed of critical deadlines and new resources. 

Starting now—not in 2027—gives your firm time to understand obligations, update policies, and prepare your payroll systems for a smooth transition. For detailed guidance on private plan options, contribution calculations, employee eligibility edge cases, or specific regulatory questions, consult the official Maryland Department of Labor website.