Maryland’s Time to Care Act (TTCA), enacted more than two years ago and since amended twice, established a paid family and medical leave insurance (FAMLI) program for Maryland employees. The Maryland Department of Labor’s new FAMLI Division recently issued proposed regulations to implement the program in accordance with the TTCA.
Applicable to all employers with at least one Maryland employee, FAMLI will provide eligible employees in Maryland with 12 weeks of paid family and medical “leave and benefits” for certain qualifying events, with the possibility of an additional 12 weeks of paid parental leave for baby bonding (for a possible total of 24 weeks of paid leave) in a rolling 12-month period. Covered employers must participate in the state administered program or comply with an approved private plan (insured, self-insured, or a combination).
Contributions and Eligibility
The program will be funded by contributions from employers and employees, which are set to begin July 1, 2025. Eligible employees may begin receiving benefits under the program starting July 1, 2026. The rate of contribution will be set annually but is capped at 1.2% of an employee’s wages up to Social Security wage base ($176,100 in 2025). Contributions will be split 50-50 between the employer and employee, but the employer may elect to pay the employee share. Employers with fewer than 15 employees will not be required to submit the employer’s portion of the contribution but must still deduct and make the employees’ contribution. If an employer fails to make the deductions, it will be responsible for the employee contributions and may not recoup the payment from its employees.
The FAMLI Division is developing an online portal where employees and employers can remit payments, apply for leave and access information about the program. Employers will also be required to submit quarterly wage and hour reports for covered employees via the online portal. The division will share sample reporting templates and may mandate the use of approved templates and forms. In addition, the division will electronically notify employers when a claim is filed.
Eligible employees are defined as any employee who has worked at least 680 hours of qualified employment in Maryland in the 12 months prior to the date leave starts. Qualified employment does not need to be with the same employer and is not dependent on time spent at a specific job. In most cases, if an employer is paying unemployment insurance contributions in Maryland for an employee, that employee will be covered by FAMLI. Self-employed individuals can choose to participate in FAMLI, but independent contractors are excluded from the program. Employers must provide notice to employees of their rights under FAMLI on Jan. 1, 2025, upon hire, annually and within five days when leave is requested. Employees must provide employers with at least 30 days’ notice for foreseeable leave, or as soon as practicable for unforeseeable leave.
FAMLI will replace up to 90% of an employee’s average weekly wages (subject to an initial $50 minimum and $1,000 maximum, adjusted annually thereafter). Eligible employees will be able to request up to 12 weeks of leave within a 12-month period and may be eligible to take up to 24 weeks of leave in a single year if they need to care for their own serious health condition and welcome a new child in the same year. Employees will not have to take FAMLI leave continuously; the leave may be taken on an intermittent basis (in a minimum of four-hour increments).
Using Your Leave
Employees may use leave for the following qualifying events:
- Welcoming a child into their home, including through adoption and foster care;
- Caring for themselves, if they have a serious health condition;
- Caring for a family member’s serious health condition; or
- Making arrangements for a family member’s military deployment.
A “serious health condition” – meaning, an illness, injury, impairment or physical or mental condition that requires either (1) inpatient care or (2) continuing treatment by a health care provider – must be certified by a “licensed health care provider,” which generally follows the federal Family Medical Leave Act (FMLA) definition of “health care provider” but does not include Christian Science practitioners.
FAMLI has a more expansive definition of “family member” than FMLA.
A “family member” of an employee is defined under FAMLI as:
- the spouse or domestic partner of the employee
- a child, sibling, grandchild or grandparent of the employee (biological, adopted, foster or step-)
- a parent of the employee or the employee’s spouse (biological, adopted, foster or step-)
- a person for whom the employee, or the employee’s spouse, has court-appointed decision-making authority over
- an individual who acted as a parent or stood in loco parentis to the employee or the employee's spouse when the employee or the employee's spouse was a minor
- a child for whom the employee has court-appointed decision-making authority over and/or who lives with the employee
- a child the employee has assumed the obligations of a parent for without formal adoption proceedings
Other Regulations
Employees will be entitled to job protections while taking eligible FAMLI leave and may be terminated only for “cause,” which is not defined under the law. Further, when returning from leave, an employee must be reinstated to their job, unless the employer determines that reinstatement will cause “substantial and grievous economic injury” to their operations and has notified the employee of the same.
Employers cannot require employees to use “General Purpose leave,” meaning PTO, sick leave or vacation before or while using FAMLI benefits. However, employees may be permitted to supplement their FAMLI benefits with such leave to reach 100% of their pay during the leave. If an employer provides paid leave specifically for purposes of parental bonding, family care, military leave or disability (i.e., short- or long-term disability benefits), the employer can require employees to use such leave concurrently with FAMLI leave. On the other hand, employees receiving unemployment insurance benefits or worker’s compensation benefits will not be eligible for FAMLI benefits (except for a permanent partial disability).
If an employer provides “Alternative FAMLI Purpose Leave,” which is leave that is specifically limited to a FAMLI purpose (i.e., paid parental leave or paid medical leave), the employer may require employees to use such leave concurrently with FAMLI leave. An event may qualify for leave under both FMLA and FAMLI, in which case FAMLI leave will run concurrently with FMLA leave. Alternatively, there may be cases when an event qualifies only for FAMLI leave, and not leave under FMLA (i.e., leave to care for a grandparent with a serious medical condition) in which case the employee’s leave would only count against their annual FAMLI leave entitlement and not use any leave from their 12-week FMLA entitlement.
If an employee declines to apply for FAMLI benefits while on leave under the FMLA, their FMLA leave will still count against their 12-week FAMLI benefit entitlement. TTCA leave is required in addition to Maryland’s existing sick and safe leave under the Healthy Working Families Act, effective since 2018, and an employee may use sick leave prior to receiving FAMLI benefits without the employer’s agreement.
The official proposed regulations are open for public comment until Nov. 18.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
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