Maryland is moving ahead with its Family and Medical Leave Insurance (FAMLI) program, a statewide paid leave benefit funded by employer and employee contributions. After several delays since the program was first created, payroll contributions are now set to begin January 1, 2027, with benefit payments starting January 2028.
Employers should use the time between now and 2027 to register, budget for contributions, and update leave policies and payroll systems.
Who’s Covered
Employers with at least one employee in Maryland will be required to register with the MD FAMLI program. Employers with 14 or fewer employees (within and outside Maryland) aren’t required to make the employer share of contributions, but their employees must still contribute and remain entitled to benefits.
Qualifying Reasons for Leave
Starting January 2028, eligible employees can take paid leave to:
- Bond with a new child (birth, adoption, foster, or kinship placement) during the first year after birth or placement
- Address their own serious health condition
- Care for a family member with a serious health condition
- Care for a service member with a serious health condition related to their service
- Manage needs arising from a family member’s military deployment
What the Program Covers
Funding
- The total contribution rate is 0.9% of wages up to the Social Security wage base.
- Employers can withhold up to half (0.45%) from employee paychecks starting with the first pay period of January 2027 and must remit both shares quarterly.
- Employers with 14 or fewer employees are exempt from the employer share.
- Employers may apply for a private plan instead of the state plan if it offers equal or better benefits.
Wage replacement
- Employees can receive up to 12 weeks of paid leave per benefit year (up to 24 weeks if a serious health condition and a new child both occur in the same year).
- Benefits are 90% of wages for earnings at or below 65% of the state average weekly wage, and 50% of wages above that threshold.
- The maximum weekly benefit is currently $1,000.
Job protection
Employers must hold an employee’s position during leave, restore them to the same or an equivalent role afterward, and continue health benefits throughout.
Timeline for Launch
- Fall 2026: Employer registration opens
- January 1, 2027: Payroll contributions begin
- April 2027: Quarterly wage and hour reports must begin
- July 2027: Employee notice requirements begin (sample notices are not yet available)
- January 2028: Employees can apply for and receive benefits
What HR Teams Should Do Now
- Register early: Registration opens in fall 2026 and requires designating an Authorized Officer for your organization.
- Decide on plan type: Evaluate whether the state plan or an approved private plan makes more sense for your workforce.
- Budget for contributions: Build the 0.9% contribution rate (split up to 50/50 with employees) into 2027 payroll planning.
- Update payroll systems: Prepare for withholding starting January 2027 and quarterly wage reporting starting April 2027.
- Review existing leave policies: Check how parental leave, short-term disability, or other existing benefits interact with FAMLI.
- Prepare employee notices: Plan to notify employees at hire, annually, and when leave is requested, with notice requirements starting July 2027.
How Sparrow Helps
Sparrow helps employers manage leave across state programs from start to finish—guiding employees through eligibility and the state claims process, tracking leave against job protection requirements, and flagging compliance obligations along the way. Your team gets clear visibility into leave status and what’s required, without adding to HR’s workload.