We Are FAMLI: Maryland’s Family and Medical  Leave Insurance Law Creates New Obligations for Employers

As the January 1, 2027, employer contribution implementation date approaches, employers should be aware of Maryland’s FAMLI Program obligations. 

In 2022, the Maryland General Assembly passed the Time to Care Act. This Act established Maryland’s Family and Medical Leave Insurance (FAMLI) Program. Housed under Title 8.3 of the Maryland Labor and Employment Code, Maryland’s FAMLI creates a state-run insurance program that allows eligible employees to take job-protected leave from work for certain qualifying family and medical reasons and still receive a portion of their pay. The program is funded through small payroll contributions shared between employers and employees, and employers have the option to choose between utilizing the state fund and obtaining private insurance to cover the mandatory paid leave. 

After several delays, FAMLI’s program funding structure will soon impose several new obligations for Maryland employers, ranging from employer contributions and payroll deductions to notice requirements to employees. 

Eligibility and Qualifying Reasons for Taking FAMLI  

Employees 

Employees may be eligible for FAMLI benefits if the employee:  

• performs “qualified employment” in Maryland, and 
• has worked at least 680 hours in qualified employment for any employer over the prior 12-month period. 

“Qualified employment” is defined to mean: (1) employment for which the employer is required to pay into Maryland's unemployment insurance system; or (2) even if the employer does not pay into any unemployment system, an employee may still perform “qualified employment” as long as the work has a sufficient tie to Maryland. Under the statute, that tie exists if the work is done entirely in Maryland, including work done on federal government property in Maryland, or work that crosses state lines but still takes place in Maryland. The tie also exists if the work is only partly done in Maryland, as long as any work done outside Maryland is just a small or occasional part of the job. Finally, if the employee lives in Maryland and does not do any meaningful part of their work in another state that controls or manages the job, that connection to Maryland is satisfied as well. 

As employers continue to offer flexible teleworking policies, some employees may live in one state while working in another. The chart below (as well as the FAMLI FAQ page) may help employees determine whether they are eligible for FAMLI benefits:
 

Resides	Works	FAMLI-Eligible?
in Maryland	in Maryland	Yes
in Maryland	outside of Maryland	No
outside of Maryland	in Maryland	Yes
outside of Maryland	outside of Maryland	No
outside of Maryland	remotely outside Maryland BUT employer is based in Maryland	No

 

With limited exceptions, eligible employees will receive up to 12 weeks of FAMLI benefits each year, with benefits of up to $1,000 per week. Employees are permitted to use FAMLI for a host of reasons, including: 

• Bonding with a new child, 
• Attending to the employee’s serious health condition, 
• Caring for a family member with a serious health condition, 
• Caring for a family member in uniformed service who has a serious health condition caused by their service, and 
• Managing needs arising from a uniformed service family member’s deployment. 

An additional 12 weeks of FAMLI benefits may be available in the same year if an employee becomes eligible for medical leave for the employee’s own serious health condition and eligible for bonding leave following the birth or placement of a child.  

Employers  

FAMLI extends to all employers with at least one employee in Maryland. Employers, however, may face different contribution requirements based on the size of their respective workforces. 

Contributions and Payroll Deductions 

Employer contributions, as well as an employee’s payroll deductions, will begin on January 1, 2027. Benefits will become payable to employees starting on January 3, 2028. For 2027, the total contribution rate will be 0.90% of qualified wages, which may be split between the employer and employee, with a current maximum allowable employee contribution of 0.45%.  

Employers with fewer than 15 employees, however, are exempt from the employer portion of the total contribution rate, but they must withhold and remit the employee share of 0.45%. Private plans may set their own rates, as long as the amount withheld does not exceed the contribution rate under the state plan. 

Employer Registration and Notice Requirements 

Registration Requirements 

All employers must register with the FAMLI program. Additionally, employers must:  

• Submit quarterly wage and hour reports electronically, every quarter, starting in April 2027.  
• Remit contributions electronically every quarter, starting in April 2027. 
• Employers enrolled in a private plan are not required to remit contributions but still must submit quarterly wage and hour reports and will further be required to submit claims data to the FAMLI Division.  
• Employers enrolled in a private plan must submit a Declaration of Intent (DOI) between September 1, 2026, and November 15, 2026, and the plan must be approved by the state in order to be exempt from FAMLI’s contribution requirements.  

Notice Requirements 

Employers must also provide notice to employees about paid family and medical leave at specific times throughout their employment, including: 

• By July 3, 2027 – six months before benefits become available, 
• When an employee is hired, 
• Once per year, 
• When an employee indicates that they want to take FAMLI leave, and 
• When the employer knows the employee is taking leave for a qualifying reason.  

Employers who receive payroll deductions from employees must provide notice at least one pay period before payroll deductions begin. 

The FAMLI Division will create sample notices for employers to use and will notify participating employers when these forms are available. 

Strategies to Ensure Compliance 

With payroll contributions slated to begin at the beginning of 2027, employers should begin taking the necessary steps now to comply with the FAMLI provisions. To start, employers should register with the FAMLI program. Next, employers should consider whether they prefer to enroll in a private plan, and if so, submit a DOI by the November 15, 2026, deadline. Lastly, employers should continue to keep accurate records of employee gross wages and hours worked and submit timely quarterly reports. 

Crowell & Moring’s Labor and Employment and Employee Benefits teams are available to advise employers on Maryland’s FAMLI requirements and strategies for adhering to the new state law.