July 8, 2026
By
AJ Esral

Maryland’s paid family and medical leave program is moving from concept to reality, at long last. Beginning on January 1, 2027, Maryland employers will need to start making payroll contributions to the state’s Family and Medical Leave Insurance program (FAMLI), and one year later, in January 2028, eligible employees will have access to paid, job-protected leave for qualifying medical, caregiving, parental, and military reasons.

For employers, the time to prepare is now. FAMLI will affect payroll systems, handbooks, leave administration, employee notices, and the way existing benefits like PTO, parental leave, short-term disability, and FMLA are coordinated.

What follows is a basic sketch of what employers need to know to start preparing now.

What FAMLI Provides

FAMLI provides paid family leave; you can think of it as a sort of paid FMLA. FAMLI creates a statewide insurance system, funded by payroll contributions, that will provide eligible Maryland employees with partial wage replacement of up to $1,000 per week and up to 12 weeks of job-protected leave per year. (There is also an option to take out private insurance for this.)

FAMLI leave is not ordinary sick leave. It is designed for major life and health events: serious medical conditions, caregiving needs, new-child bonding, and military-family exigencies.

Importantly, FAMLI leave runs concurrently with FMLA leave, when applicable. However, sometimes FAMLI may apply where FMLA does not. Employers will need updated leave-administration procedures to identify when both laws apply and when only one does.

FAMLI leave does NOT run concurrently with other paid leave. In other words, employers cannot require employees to use their PTO, paid sick leave, or paid vacation leave before using FAMLI leave (although employers may allow the two to run concurrently to “top off” FAMLI benefits to an employee’s full salary). Employers MAY require employees to use their unpaid leave concurrent with FAMLI leave, however.

Coverage and Eligibility

Unlike the FMLA, which generally applies to employers with only 50 or more employees, FAMLI applies to all employers with at least one employee in Maryland. There are no small-business exemptions (although they do have a smaller contribution obligation). Employees who have worked at least 680 hours in the past 12 months are eligible for FAMLI coverage; there are no age restrictions or minimum income requirements. Importantly, FAMLI does NOT cover federal employees or self-employed Maryland individuals.

How FAMLI is funded

FAMLI is funded through payroll contributions from both employees and employers. For wages paid in the calendar year of 2027, the contribution rate is 0.9% of wages, up to the Social Security wage cap, split equally between the employer and employee at 0.45% each. So, if your employee is making $1,000 per week, the total FAMLI contribution would be $9 for that week, split equally between the employer (out of pocket) and the employee (via payroll deductions).

Small employers (fewer than 15 employees) are exempt from their half of the contribution rate, and are only responsible for collecting and remitting the 0.45% from the employee (so $1,000 per week becomes $4.50 from the employee, and the employer pays nothing).

The contributions must be collected/set aside during the regular pay cycle and cannot be deducted from an employee’s paycheck retroactively. Contributions are then remitted to the state quarterly.

One more note on this: although employers will be automatically enrolled in the state plan after registration, they may seek approval for a private plan, either commercial or self-insured.

Employer Deadlines

Here are some deadlines to be aware of in the coming months:

  • Fall 2026 – Employers are expected to be able to register online.
  • September 1, 2026 – Declaration of Intent period opens for employers pursuing a private plan.
  • November 15, 2026 – Deadline to submit a Declaration of Intent if seeking private-plan treatment during the seeding period.
  • January 1, 2027 – Payroll contributions begin.
  • April 30, 2027 – First quarterly contribution payment/report due for Q1 2027 wages.
  • July 2027 – Employee notice obligations begin six months before benefits become available.
  • January 2028 – Employee benefits become available.

What Employers Should Do Now

As you can imagine, this is a far-reaching law that will have implications across many areas of a company. Here are some ways employers can start preparing today:

  • Identifying Maryland-localized employees.
  • Budgeting for 2027 payroll contributions.
  • Coordinating with payroll providers.
  • Deciding whether to use the State Plan or explore a private plan.
  • Identifying the authorized officer who will create the employer profile.
  • Reviewing PTO, sick leave, parental leave, FMLA, STD, and handbook policies.
  • Preparing employee notices before deductions begin.
  • Training HR/managers to recognize FAMLI-triggering language.
  • Creating a process to coordinate FAMLI, FMLA, ADA accommodations, paid sick leave, and workers’ compensation.

Maryland FAMLI is not just another leave policy. It is a far-reaching paid-leave insurance system that affects every Maryland employer in a variety of ways. Employers should use the remainder of 2026 to prepare their payroll systems, policies, and insurance plans, so they can hit the ground running come 2027.

If you are looking to redraft your PTO policies, figure out your FAMLI obligations, or train your managers, shoot an email to aj@luchanskylaw.com and we’ll take care of you.