With Maryland FAMLI contribution requirements fast approaching, employers should begin preparing now. The decisions you make now, from registration to evaluating private plan options, can significantly impact your organization over the next two years.
Over the next several weeks, we'll be helping employers understand what Maryland FAMLI means for their organizations, what deadlines are approaching and how to prepare for implementation. Whether you're an employer with one Maryland-based employee or hundreds, understanding the basics now can help you avoid surprises later.
Let’s start with the fundamentals.
What Is Maryland FAMLI?
Maryland's Family and Medical Leave Insurance (FAMLI) program is a state-mandated paid leave benefit that will provide eligible workers with job protection and partial wage replacement when they need time away from work for certain family or medical reasons. Eligible employees may receive benefits for up to 12 weeks of leave in a 12-month period, with weekly benefits reaching up to $1,000 depending on their circumstances. Employees who have their own serious health condition and welcome a child in the same benefit year may qualify for up to 24 weeks.
The program covers several qualifying life events, including:
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Bonding with a new child
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An employee’s own serious health condition
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Caring for a family member with a serious health condition
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Certain military deployment-related situations involving a family member
Benefits are scheduled to become available to eligible employees beginning January 1, 2028.
Who Qualifies for Benefits?
To meet the work-hours requirement for FAMLI benefits, an employee must have worked at least 680 hours in a position covered by Maryland FAMLI during the four calendar quarters reported before they file a claim or begin leave, whichever comes first. This calculation can include time worked for multiple employers, meaning employees are not required to earn all qualifying hours with a single organization.
This broad eligibility standard means employers may have workers who qualify even if they are part-time, seasonal or relatively new to the organization.
What Employers Need to Know
If you have at least one employee working in Maryland, FAMLI applies to your organization. This includes employers headquartered outside Maryland that have employees working remotely or in offices within the state. Household employers are subject to the requirements as well. An owner who is also the business’s only employee is treated as self-employed for FAMLI purposes, including an owner of an S corporation, and is not required to register as an employer.
Employers should register with the state’s FAMLI system as soon as possible in advance of the January 1, 2027 contribution start date. Registration must be completed by an authorized officer of the organization, who will be able to add team members and connect with trusted advisors through the platform. Third-Party Agents (TPAs) cannot register on behalf of clients. A Power of Attorney signed by an Authorized Officer is required to connect TPAs to an employer’s account.
After registration, employers will automatically be enrolled in the state plan unless they pursue an approved private plan alternative.
Beyond understanding the basics, employers should begin evaluating one of the most important decisions in the implementation process: whether to participate in the state's program or pursue a private plan alternative.
State Plan Versus Private Plan
One of the most important decisions employers will face is whether to remain in the state plan or pursue a private plan.
Private plans may be offered through a commercial insurance carrier or be self-funded. Depending on your workforce and benefits strategy, a private plan may provide administrative efficiencies and potentially different contribution structures.
Employers considering a private plan should begin discussions with their insurance broker sooner rather than later. Organizations seeking to avoid remitting contributions to the state during the 2027 seeding period, when contributions build up funds before benefits begin, should pay close attention to the November 15, 2026 Declaration of Intent (DOI) deadline.
Regardless of whether an employer participates in the state plan or pursues an approved private plan, understanding how FAMLI is funded is an important part of planning ahead.
How Will FAMLI Be Funded?
FAMLI is funded through contributions from employers and employees. Contribution requirements begin January 1, 2027. Employers may cover the employee share instead of withholding it from pay. All employers, regardless of plan type, must submit their first quarterly wage and hour reports by April 30, 2027.
The current state total contribution rate is 0.9% of covered wages, up to the applicable annual Social Security wage cap. In many cases, employers and employees can each be responsible for half of the contribution amount, 0.45% each. Employers may choose to cover some or all of the employee's share; however, the employee contribution paid by the employer under the state plan must generally be treated as taxable wages and reported on the employee's Form W-2. Employees cannot opt out of the program, even if they may not qualify for benefits.
For employers with fewer than 15 total employees, counting both Maryland and out-of-state employees under the same EIN, the rules are different. Small employers are exempt from paying the employer share of contributions and are only required to remit employee contributions, though they may choose to cover the employee share as a benefit to their workforce.
How the Process Works
At a high level, the program follows a straightforward cycle:
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Employee contributions are collected through payroll withholding unless the employer covers them
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Employers submit quarterly wage and hour reports
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Employers remit required contributions or hold them in escrow under an accepted DOI
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Employees apply for benefits through their employer’s state or approved private plan when a qualifying event occurs
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The state or private plan reviews claims and determines eligibility
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Approved benefits are paid by the state or private plan
Key Dates to Put on Your Calendar
Now
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Register your organization in the FAMLI system
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Identify the Authorized Officer responsible for registration
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Consult with your insurance broker regarding private plan opportunities
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Submit your DOI Form by November 15, 2026, if you intend to pursue a private plan and hold 2027 contributions in escrow instead of remitting them to the state
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Accept TPA invitations now to manage your account later
December 2026
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Implement any necessary payroll updates
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Notify employees at least one pay period before payroll deductions begin
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Factor FAMLI costs into budgeting and workforce planning
January 2027
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Begin withholding employee contributions unless your organization covers them
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Review how FAMLI interacts with your organization's existing leave and benefits programs
April 30, 2027
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Submit your first quarterly wage and hour report
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Remit required contributions, unless holding them in escrow under an accepted DOI
January 2028
- FAMLI benefits become available to eligible employees
Don't Wait Until Contributions Begin
Although benefit payments won't begin until 2028, the employers that are best positioned for success will start planning well before contribution requirements take effect. Registration, payroll planning, employee communications and evaluating state versus private plan options should all be on your radar now.
The good news is that Maryland has developed several resources to help employers prepare, including FAQs, webinars, registration guidance and other educational materials available through the Maryland Department of Labor's FAMLI website.
Need Help?
Navigating Maryland FAMLI can feel overwhelming, especially as deadlines approach and new guidance continues to emerge. Karen Hess works closely with Maryland employers to understand their options, prepare for compliance and evaluate whether a state or private plan may be the right fit for their workforce and business goals.
Contact Karen here or call 800.899.4623 to schedule a free consultation to discuss your organization’s FAMLI planning needs.
