As we previously reported last year, Maryland passed their own paid family/medical leave income replacement program in April 2022 (called “A Time to Care Act of 2022” and hereinafter referred to as “MD PFML”). The program was initially scheduled to become effective on January 1, 2025 with employee contributions scheduled to begin on October 1, 2023.
Maryland Governor Wes Moore signed an amendment on May 3, 2023 modifying certain aspects of the MD PFML program. The highlights of these modifications include:
- Effective date delay: The effective date of the program is delayed to January 1, 2026.
- Contributions delay: The start date for employer and employee contributions to the program is delayed to October 1, 2024.
- Contribution split change: The employer/employee contribution split will be set at 50% / 50% (rather than being determined by the Maryland Secretary of Labor after a study every two years, as initially established in the legislation).
- Contribution rate cap change: The total rate of contribution may not exceed 1.2% of an employee’s wages (rather than the initial rate applying to all wages up to and including the Social Security wage base).
- Revised rules regarding MD PMFL interaction with other paid leave: See below for more information on this modification.
Read on for specific details on the MD PFML program.
Covered Employers
Employers covered under MD PFML include all private companies and governmental entities that employ at least one individual in the state of Maryland, except for individuals who are the sole owner and the only employee of a sole proprietorship, limited liability company, C corporation, or S corporation.
Covered Employees
Employees covered under MD PFML include employees who have worked at least 680 hours over the 12-month period immediately preceding the date on which leave is to begin.
Self-employed individuals may opt into MD PFML by contributing to the program.
Leave Types & Amounts
Covered employees will be able to take MD PFML for a total of 12 weeks for the different types of leave events outlined below.
- Family leave: to care for a family member[1] with a serious health condition or to care for a child in the first year after birth, adoption, kinship care, or foster care placement.
- Medical leave: to care for oneself when dealing with a serious health condition that prevents the employee from performing the functions of their position.
- Military service-related leave: to care for a service member who is the covered employee’s next of kin.
- Qualifying exigency leave: to make arrangements for a family member’s military deployment.
Covered employees may receive 12 weeks of family leave for parental bonding purposes in addition to up to 12 weeks of medical leave in the same benefit year under certain circumstances.
Intermittent leave may be taken under MD PFML as long as the employee provides reasonable advance notice and takes intermittent leave in increments of at least four hours at a time.
Benefits Effective Date
January 1, 2026 (initially scheduled to begin January 1, 2025)
Benefit Amount
Weekly benefits will range from $50 to $1,000, based on an employee’s average weekly wage.
Benefit Contributions
Contributions to MD PFML, now scheduled to start October 1, 2024[2], will be split 50% / 50% between those employers with 15 or more employees and their employees. Employers are prohibited from deducting any portion of the employer contribution from employees’ wages.
Employers with less than 15 employees are not required to contribute to the program but their employees must still contribute.
Job Restoration & Health Benefits Continuation
An employee’s job must be restored after taking MD PFML unless the employee is terminated for cause or restoration would cause substantial and grievous economic injury to the employer’s operations and prescribed advance notice is provided to the employee. Employers are prohibited from taking adverse action against employees for taking or even inquiring about MD PFML.
Employers are required to maintain an employee’s existing health benefits at the same employee contribution amount while taking MD PFML.
Employee Notice
When the need for leave under MD PFML is foreseeable, employers may require employees to provide notice 30 days before taking leave. When the need for leave is not foreseeable, employees must provide notice to their employer as soon as practicable and in accordance with the employer’s notice requirements for requesting other leave.[3]
Private Plan Option
Employers may satisfy their MD PFML obligations and opt-out of collecting and remitting required premium contributions by applying for approval of a private plan from the state. The private plan must provide all of the same benefits, rights, and protections to employees as the state program at the same employee contribution rate.
Interaction with Other Paid Leave/FMLA
Employers cannot require employees to exhaust paid vacation, sick, or other employer-provided paid time off prior to taking MD PFML. However, an employer may require that benefits payments under MD PFML run concurrently with leave provided under an employer-provided parental care, family care, military leave, or disability leave policy.
Employers and employees can mutually agree to supplement employees’ MD PFL benefit payments with paid vacation, sick leave, or other employer-provided paid time off in order to receive 100% of the employee’s average weekly wage.
If the qualifying reason for taking MD PFML benefits also qualifies for unpaid leave under the federal Family and Medical Leave Act (FMLA), both MD PFML and FMLA leaves will run concurrently with each other.
Employer Notice/Posting
The Maryland Department of Labor (MD DOL) will develop and issue a MD PFML standard notice for employers to provide to all employees upon hire and annually as well. This standard notice will detail employees’ rights, protections, and responsibilities under MD PFML.
Enforcement
The Maryland Secretary of Labor will be responsible for enforcing the MD PFML program requirements by conducting investigations, imposing penalties, and bringing civil actions against employers for alleged violations of the program.
Next Steps for Employers
These recent MD PFML delays provide additional time for covered employers to begin preparations to implement the program, including:
- Updating payroll systems for the new contribution deductions starting in 2024.
- Training managers and Human Resources teams on these new program requirements.
- Updating employee handbooks and leave materials, in conjunction with employment and labor counsel, to ensure compliance with the program.
Implementing regulations and model standard notices are anticipated to be released from the Maryland DOL in the next several months. Risk Strategies will continue to follow developments and provide updates when available.
The compliance landscape around state PFML regulations is complex and changing rapidly. Risk Strategies will continue to work diligently to provide our clients with the most up-to-date information. Contact us directly at benefits@risk-strategies.com.
[1] The definition of “family member” under MD PFML is expansive and includes spouses, children (biological, adopted, foster, and step), parents, parents-in-law, grandparents, grandchildren, and siblings, among other individuals.
[2] Premium contributions were initially scheduled to begin October 1, 2023.
[3] Provided the employer’s notice requirements for other leave do not interfere with the employee’s ability to take MD PFML.
