Maryland is preparing to launch a new paid Family and Medical Leave Insurance (FAMLI) program starting July 1, 2026. Under the program, workers will receive job protection and be able to take time away from work to care for themselves or a family member and still be paid up to $1,000 a week for up to 12 weeks. FAMLI is a state-run insurance program with employers and workers expected to make contributions into a fund administered by the State.

As an alternative to participating in FAMLI, an employer may apply to use a commercial or self-insured plan. When a worker needs to take leave, either the State or the private plan will pay the worker a portion of their salary.

July 1, 2025 marks the date when payroll deductions will begin and employers must remit the first payments to the state by October 2025. The state will create a trust fund with the idea that the fund will grow over time and be ready for workers to start using benefits on July 1, 2026.

Contribution rates depend on payroll size. For employers with 15 or more employees, the rate is 0.90% of covered wages up to the Social Security Cap. Employers may withhold up to (0.45%) of the contribution rate from their employees’ pay. For employers with fewer than 15 employees, the rate will be 0.45% of covered wages up to the Social Security Cap. Employers may withhold up to the full amount from their employees’ pay. Private plans will set their own rates and employees cannot be charged more in a private plan than they would be through the State plan.

FAMLI applies to all employers with at least one worker. There are no exclusions for part-time or  seasonal workers. FAMLI is not applicable to independent contractors or federal government employees.  

As the regulations become finalized, Maryland’s Department of Labor intends to provide continuing updates with webinars, email notifications, and FAQs. Reach out to an RKW employment lawyer if you need help interpreting what this new law means for your business.

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