Maryland FAMLI: What Employers Need to Know Ahead of 2027

In 2022, Maryland enacted the Family and Medical Leave Insurance (FAMLI) program to provide most Maryland employees with paid family and medical leave. Following several legislatively mandated delays, the Maryland Department of Labor (MDOL) published final regulations on March 30, 2026, and has since released new resources to help employers and their workers understand and prepare for the program. With employer and employee contributions officially beginning January 1, 2027, and benefits commencing in January 2028, employers should begin preparing now. Below is a summary of key program details to help guide that process.

FAMLI Program Overview: Who Is Covered and What It Provides

FAMLI provides most Maryland employees with up to twelve weeks of paid leave for qualifying family and medical reasons. Employees are eligible if they have worked at least 680 hours in Maryland over the 12 months preceding the start of leave. Notably, this threshold may be met through work with any combination of employers.

Qualifying events include:

• The employee's own serious health condition;
• A family member’s serious health condition;
• Parental bonding;
• Military caregiver leave;
• Qualifying military exigencies.

Importantly, Maryland’s definition of "family member" is broader than under the federal Family and Medical Leave Act (FMLA), extending to domestic partners, grandparents, grandchildren, siblings, and individuals standing in loco parentis.

Benefits are calculated using a two-tier wage replacement formula: 90% of wages up to 65% of the state average weekly wage, plus 50% of wages above that threshold, subject to a $1,000 weekly maximum.

How FAMLI Is Funded: Contributions and Plan Options

The 2027 state plan premium rate is 0.9% of payroll up to the Social Security Wage Base. Employers may pass up to 50% of the cost through to employees, and small employers (those with fewer than 15 total employees, including employees both inside and outside of MD) will only be responsible for remitting 50% of the contribution rate (which may be withheld from employees’ pay).

While payroll deductions begin January 1, 2027, the first quarterly payment to the State is due April 30, 2027. Going forward, contributions will generally follow this quarterly schedule:

• Q1 (Jan. 1–Mar. 31): due April  30;
• Q2 (Apr. 1–Jun. 30): due July 31;
• Q3 (Jul. 1–Sep. 30): due October 31; and
• Q4 (Oct. 1–Dec. 31): due January 31.

Coordinating FAMLI With Existing Leave Policies

The final regulations include important rules about how FAMLI leave interacts with an existing paid leave programs. In particular, general purpose leave (e.g., PTO, vacation, or sick leave) may not be required to run concurrently with FAMLI leave, though employees may use paid sick leave before FAMLI benefits without a written agreement. Employers may designate a separate bank of leave as Alternative FAMLI Purpose Leave (AFPL) specifically for FAMLI-qualifying purposes and require it to run concurrently with FAMLI under specified conditions, with FAMLI serving as the primary benefit and AFPL supplementing up to 100% of the employee's average weekly wage.

Notice and Administrative Requirements

The final regulations also establish clear notice requirements for employers. FAMLI notices must be provided to employees:

• At hire;
• Annually;
• Six months before benefits commence;
• 30 days before any changes to FAMLI procedures; and
• When the employer becomes aware that an employee's leave may qualify for FAMLI.

The FAMLI Division is expected to create sample notice templates for employers to use to meet these requirements. Employers should monitor the Division's "For Employers" page on the MDOL website for updates.

Choosing A Path: State Plan vs. Private Plan

Employers have three options for providing FAMLI benefits: (1) the default state-administered plan; (2) a self-insured Equivalent Private Insurance Plan (EPIP); or (3) a commercially insured EPIP. The timing of when contributions are owed may differ depending on which path you choose.

Employers will be automatically enrolled in the state-administered plan unless they take affirmative steps to offer a private plan instead. Here's a breakdown on the plan differences:

• State Plan: Employers enrolled in the state plan will be required to pay a full year of premiums in 2027 before benefits begin in January 2028.
• Equivalent Private Insurance Plans (EPIPs): Private plans (whether self-insured or commercially insured) must provide the same level of benefits and services as the state plan, or better, and must be approved by the FAMLI Division. MDOL has published information for employers who wish to use a private plan instead of the default state plan.
  • Commercially insured EPIPs will not owe premiums until January 2028.
  • Self-insured EPIPs: Employers with 50 or more employees are eligible to apply for a self-insured plan. Employers with fewer than 50 employees may also apply, provided they already have their own FAMLI-compliant plan in place by July 31, 2026.

Employers who want to offer a private plan and be exempt from the state plan contributions must submit a Declaration of Intent (DOI)  to the FAMLI Division between September 1 and November 12, 2026. Employers that submit a timely DOI may be exempt from state plan contributions during 2027 but must hold escrowed contributions pending EPIP approval. Full private plan applications will be available in summer 2027 and will be due October 1, 2027.

Employer Registration and What’s Next

Regardless of what kind of plan an employer elects, all employers with at least one employee working in Maryland must register with FAMLI. Initial registration must be completed by an authorized officer who needs to provide an email address and phone number as well as a Social Security Number and a valid form of identification. Third party agents like payroll providers, PEOs, CPAs, and HR or benefits administrators can also register on behalf of their clients. Such agents will need to have their clients sign a power of attorney to manage FAMLI tasks on their behalf.

All employers must electronically submit Quarterly Wage and Hour Reports (QWHRs) to the FAMLI Division – including those with private plans. FAMLI uses the information provided in these reports as the basis for determining employee eligibility and benefit amounts based on the number of hours they work. Contributions must be paid on or before the quarterly due date to avoid penalties and interest.

Final Thoughts

Maryland's FAMLI program represents a significant shift in how employers manage paid leave, and with contributions beginning January 1, 2027, the preparation window is shorter than it may seem. From registering with the FAMLI Division and evaluating private plan options to updating leave policies and training personnel, there is meaningful groundwork to lay before the end of the year. Employers should continue to monitor the MDOL FAMLI Division website as additional guidance, notice templates, and private plan application materials become available.

To better understand how Maryland FAMLI impacts your organization’s leave programs, policies, and compliance obligations, please connect with a member of our OneDigital HR Consulting team.