How Paid Family and Medical Leave Works in Maryland: An Employer’s Guide

Maryland is one of 14 states to pass paid family and medical leave (PFML) legislation. PFML affords people time off work to handle critical life transitions with some financial security. 

If you have employees in Maryland, regardless of whether or not your business is based in the state, you need to understand how paid leave works and what your employees are entitled to.

Below, we break it all down: what you’re required to offer employees, what you’ll spend, and how Maryland’s program coordinates with federal leave laws. 

What is Maryland’s paid family and medical leave program? 

Maryland Family and Medical Leave Insurance (FAMLI) will provide eligible employees with up to 12 weeks of paid, job-protected leave for qualifying events. FAMLI isn’t in effect yet; the law was passed as part of the Time to Care Act in 2022, but the program doesn’t start until January 2028 (though employers must begin making contributions in January 2027). 

With FAMLI, eligible workers can take leave to: 

1. Bond with a new child (applies to newborn babies, as well as children placed through adoption, foster care, and kinship care)

2. Care for a family member with a serious health condition

3. Manage a serious personal health condition

4. Care for a family member injured during military service

5. Prepare for a family member’s military deployment

In addition to partial wage replacement, employees who take FAMLI leave get job protection. So, as an employer, you’re required to reinstate Maryland employees to their positions after leave. 

What is the Maryland State Employee Paid Family and Medical Leave program?

Maryland state employees also get PFML, but they get it a bit sooner than private-sector workers. Starting July 1, 2026, state employees can take up to 12 weeks of paid, job-protected leave for the same qualifying reasons listed above. They’re automatically eligible, with no length-of-service or earnings requirements to meet.  

How is Maryland FAMLI funded?

Maryland’s FAMLI program is funded through employer and employee contributions. Starting in 2027, you’ll send quarterly contributions to the FAMLI Division. 

The contribution rate for 2027 will be 0.9% of wages up to the Social Security cap. Keep in mind that the rate might change slightly each year, but Maryland law has capped it at 1.2%. Here’s how the contribution breaks down: 

How much wage replacement do employees receive? 

FAMLI offers employees up to 90% of their usual weekly wages while on leave. An employee’s exact benefit amount depends on how much they earn. 

The state takes an employee’s total wages for their highest-earning quarter of the year, then divides that amount by 13 (the number of weeks in a quarter) to get the average weekly wage. From there, the state compares an employee’s average weekly wage to the state’s average weekly wage, which changes every year. 

• If an employee’s average weekly wage is 65% or less of the state’s average weekly wage, they’ll receive 90% of their usual wages.

• If an employee’s average weekly wage is more than 65% of the state’s average weekly wage, they’ll receive 90% of their wages up to the 65% amount, then 50% of the wages above that 65% threshold.

The maximum benefit an employee can receive per week, regardless of their earnings, is $1,000. 

Who’s eligible for FAMLI in Maryland? 

To qualify for FAMLI in Maryland, employees need to have worked at least 680 hours within Maryland in the four calendar quarters before they file a claim or before leave starts. 

Can self-employed workers qualify for FAMLI?

Eventually, self-employed people will be able to opt into the FAMLI program and pay their own contributions. Maryland doesn’t have information on how this will work quite yet, so make sure to check the website for updates. 

How does FAMLI work with state and federal leave laws?

Maryland’s FAMLI program will operate alongside the federal Family and Medical Leave Act (FMLA), which guarantees eligible employees 12 weeks of unpaid, job-protected leave. Any employer in the United States with 50 or more employees working in a 75-mile radius is subject to FMLA requirements. 

Unfortunately, FMLA leave isn’t available to employees who work for smaller employers. To help fill in the gap, Maryland created the Maryland Parental Leave Act (MPLA). 

Under this law, employers in Maryland with 15-49 employees are required to give them six weeks of unpaid, job-protected leave following the birth, adoption, or foster care placement of a child. To qualify, an employee has to meet both requirements:

• Have worked for their employer for at least 12 months

• Have worked at least 1,250 hours during the previous 12 months

When an employee qualifies for more than one type of leave—say, MPLA and FMLA leave—they can’t stack the leaves on top of one another. Instead, the leaves run alongside each other and employees receive whichever benefits are more robust. 

Maryland FAMLI vs FMLA vs MPLA 

Does Maryland mandate other types of leave?

The Maryland Healthy Working Families Act requires employers with 15 or more employees to provide paid sick and safe leave to eligible employees.  

Employees accrue one hour of sick leave and safe leave (paid at their regular rate of pay) for every 30 hours they work, up to 40 hours of paid sick and safe leave each year. 

What should my business do to comply with Maryland’s FAMLI program?

Participating in FAMLI is mandatory for all Maryland-based employers and out-of-state employers with Maryland-based workers. If that’s your business, here’s what you need to do:

1. Start planning for FAMLI

2028 may seem far away right now, but it’s going to come quickly—and you need to be prepared. Make sure you start taking the following steps: 

• Forecast payroll expenses for 2027 and beyond, accounting for FAMLI contributions

• Review your existing employee leave policies to see what you might need to change

• Consider whether you’ll need new administrative or tech support to withhold payroll contributions

• Designate an “Authorized Officer” to act on your company’s behalf during paid leave registration (i.e., a business owner, executive director, CFO, or COO)

• Update your employee handbook with information about FAMLI and what employees can expect

• Send a company-wide email announcement informing employees about FAMLI and what to expect with payroll deductions

2. Register with the FAMLI Division

If you have at least one employee, you’re subject to FAMLI rules. The first step is to register as an employer at PaidLeave.Maryland.gov. Registration opens sometime in the fall of 2026. 

Once you register, you’ll be automatically enrolled in the state FAMLI plan. From there, you can appoint a third-party agent (like a payroll provider) to interact with FAMLI on your behalf or apply for a private leave insurance plan instead. 

3. Notify employees about FAMLI

FAMLI hasn’t taken effect yet, but it’s up to you to educate your employees about their leave rights. You need to notify employees about FAMLI at the following times: 

• December 2026, one pay period before payroll deductions begin in January 2027

• July 2027, six months before benefits begin in January 2028

• When an employee is hired

• Once a year 

• When an employee requests leave

• When you know your employee is going to take leave for a qualifying reason (e.g., an employee tells you they’re expecting a child)

The leave notice should include basic information about FAMLI, like the qualifying reasons for leave, leave length, wage replacement amount, employee protections, and claim instructions. The FAMLI Division of Maryland will put out a sample notice you can use; sign up for email updates here to receive it. 

4. Follow all other state and federal leave requirements 

Whether your employees qualify for FAMLI, FMLA, or MPLA, you’re required to: 

1. Continue paying your portion of their health insurance premiums during leave 

2. Reinstate them to their jobs when they return from leave 

You also need to post a workplace notice for FMLA leave, and prepare to give employees a Rights and Responsibilities Notice and Designation Notice if they end up requesting FMLA leave. 

5. Keep careful records

The Internal Revenue Service (IRS) recommends keeping all your payroll and personnel records for at least three years, including: 

• Employment contracts

• Payroll records

• Paystubs

• Official employee requests for leave

• Copies of official FMLA notices

• Documentation of leave start and end dates

What will Maryland’s FAMLI program cost me? 

How much FAMLI will cost your business depends on the size of your workforce and what your employees earn. If you have fewer than 15 employees, it won’t cost you a cent; you can deduct the full 0.45% contribution from your employees’ pay. 

If you have 15 or more employees, it’ll cost you 0.45% of your employees’ wages every quarter. Let’s say one of your employees earns $50,000 a year at your business. Contributing 0.45% of their wages would cost you $56.25 each quarter, or $225 annually. 

If you have 20 employees, all of whom earn between $50,000 and $100,000 a year, you’ll end up spending somewhere between $4,500 and $9,000 a year on leave contributions. 

Of course, if you decide to top up your employees’ pay to 100% of their usual earnings, or to offer paid time off beyond 12 weeks, your payroll totals will increase. But you’ll also have a unique advantage as an employer: offering extra-generous benefits helps you stand out when hiring and hold on to talented workers longer. 

Do I need to change my company’s existing employee leave policy? 

Even though FAMLI isn’t in full swing yet, it’s crucial to update your leave policy. You’ll want to tell employees how your current policy will shift with the introduction of FAMLI, and explain in as much detail as possible how FAMLI will work. 

Aim to incorporate the following info: 

• The qualifying leave situations for Maryland FAMLI (parental leave, caregiving leave, medical leave, and military exigency leave)

• Who qualifies as a “family member” and what constitutes a “serious health condition” (Maryland has very inclusive definitions) 

• The eligibility requirements (680 hours worked in the four quarters before leave)

• How many weeks employees can take (up to 12 weeks in a year)

• The partial wage replacement they can expect (up to 90% of their average weekly wage)

• The contributions they’ll be required to make (0.45% of their earnings) and when those begin (January 2027)

• The job protection and continued health insurance they’re entitled to

• How FAMLI intersects with FMLA and MPLA

• How and when to request a leave

• Whether or not certification is required to take leave

Running a business in Maryland

If you need more Maryland-centric business resources, Gusto is here to help. Check out our comprehensive guides to:

• Hiring in Maryland

• Starting a new business in Maryland

• Business tax incentives in Maryland

• Retirement savings in Maryland

• Business grants and loans in Maryland

• Employer taxes in Maryland