Maryland Paid Family Leave: Employer Guide to FAMLI
Maryland paid family leave for employers: the contribution rate, who pays it, the benefit schedule, your notice duties, and every date on the calendar.
The first thing to understand about Maryland paid family leave is that the date you have written down is probably wrong. The program has been rescheduled three times since it was enacted, and most of the commentary online still carries a timeline the state abandoned.
The second thing is that the money leaves your payroll a full year before any employee can claim a benefit. Deductions start with wages paid in January 2027. Benefits open in January 2028. If you budget for both in the same year, you will be short.
This guide to Maryland's Family and Medical Leave Insurance program, called FAMLI, is written for the person who runs payroll and answers the leave request, not for the employee filing the claim. It covers what the program costs, who is covered, what you have to file and when, and how it sits alongside the federal Family and Medical Leave Act (FMLA).
I build people and records tooling for businesses without a dedicated HR department at FirstHR, and FirstHR is an onboarding and HR platform rather than a payroll provider. This is general information, not legal advice.
What FAMLI Actually Is
Family and Medical Leave Insurance is a state run insurance program funded by payroll contributions, not a leave policy you write yourself. Employees claim benefits from the state, the state pays them, and your job is to fund it, report on it, and hold the position open.
Coverage has no floor. There is no small business exemption, and unlike the state unemployment insurance system, no employment category is carved out. A family that pays a nanny is an employer for FAMLI purposes, according to the FAMLI Division of the Maryland Department of Labor.
What matters for coverage is where the work is physically performed, which the state calls a position localized in Maryland. Somebody working remotely from Maryland for a company headquartered elsewhere is covered. A Maryland resident who works full time in another state is not.
The shorthand the state offers is simple: if you pay Maryland unemployment insurance on that person, they are in the program (Maryland Department of Labor).
Who Pays and How Much
The total contribution rate is 0.9 percent of covered wages, and it is split evenly: you may withhold up to half of it (0.45 percent) from the employee, and the other half is your cost. That rate applies to wages paid between January 1 and December 31, 2027.
Contributions apply only to wages up to the Social Security cap for the year, so 2027 payroll runs on the 2027 cap. According to the Social Security Administration, that cap is $192,300 (announced October 14, 2026; the 2026 cap is $184,500), and wages an employee earns above it in 2027 carry no FAMLI contribution.
The wage definition matches the one Maryland uses for unemployment insurance, so the quarterly report takes gross wages rather than net pay, and the figure you already compute for unemployment insurance drives the FAMLI calculation too.
| Standard employer | Total contribution of 0.9 percent of covered wages. You may deduct up to half of that (0.45 percent) from the employee paycheck and the remaining 0.45 percent is your own cost. On $60,000 of covered wages that is roughly $270 from the employee and $270 from you across the year. |
| Employer with fewer than 15 total employees | You send the state only 50 percent of the contribution rate, and the full amount can come out of employee pay. The count includes employees inside and outside Maryland under the same federal Employer Identification Number (EIN). Independent contractors do not count toward the size test, per the FAMLI Division. |
| Employer covering the full cost | Nothing stops you paying the employee share as a benefit, for everybody or for a defined group. The FAMLI Division flags possible tax consequences and points employers to their own tax adviser. This is a compensation decision, not a compliance one. It is the cheapest goodwill on the list. |
The rate is not fixed forever. Starting in November 2027, the Maryland Department of Labor announces a rate each November for the following calendar year. Under current law the total cannot exceed 1.2 percent of wages up to the Social Security cap (Maryland FAMLI). Budget the first year at 0.9 percent, then treat the rate as a variable.
One mechanical rule catches employers with tipped or low hour staff. If an employee does not earn enough in a pay cycle to cover their share, you have up to six pay periods to collect it. Outside that single exception, you cannot go back and take a missed deduction from a later paycheck, so a payroll error becomes your cost.
The Small Employer Rate Break
Employers with fewer than 15 total employees remit only 50 percent of the contribution rate, and they may withhold that entire amount from employee pay. In practice that can reduce the direct employer contribution to zero while employees still contribute and stay fully covered.
The discount is not a niche carve-out. According to the Maryland Department of Labor, more than 80 percent of Maryland employers qualify for it, which makes the reduced remittance the normal case in this state rather than the exception.
The count is broader than most people assume. It includes employees inside and outside Maryland under the same federal EIN, so a company with a handful of people in Baltimore and a larger team elsewhere is measured on the combined total. Independent contractors do not count.
The break applies to the remittance obligation, not to coverage. Your employees are covered on the same terms as everybody else, they claim through the same system, and you carry the same reporting, notice, and job protection duties as an employer ten times your size.
What an Employee Receives
An eligible employee receives up to 90 percent of wages, capped at $1,000 per week, for up to 12 weeks in a 12 month benefit year. The replacement rate is deliberately progressive, so lower earners recover a much larger share of their pay than higher earners do.
| Element | How it works | Employer implication |
|---|---|---|
| Replacement rate | 90 percent of average weekly wage up to 65 percent of the State Average Weekly Wage, then 50 percent of wages above that point | Higher paid staff see a much lower effective replacement rate and may ask you to top it off |
| Weekly maximum | $1,000 per week regardless of earnings | Predictable ceiling, unrelated to your own pay scale |
| Average weekly wage | Highest of the previous four reported quarters divided by 13 | Your quarterly wage and hour reports are the input, so filing accuracy matters |
| Duration | Up to 12 weeks in a 12 month benefit year, and up to 24 weeks where an employee has both a serious health condition and a new child in the same year | Plan cover for a longer absence than 12 weeks in some cases |
| Benefit year | The 12 month period starting the Sunday before the first day of FAMLI leave | It is a rolling year per employee, not your calendar or fiscal year |
| Waiting period | None. Benefits are available from the first day of leave | No unpaid gap for you to fill or explain |
| Intermittent leave | Permitted, in blocks of at least four hours under the State Plan unless the scheduled shift is shorter, and an approved private plan may allow shorter blocks | Schedules should be agreed in advance and documented |
The absence of a waiting period is unusual. Most disability style programs impose an elimination period of several days, and employers get used to bridging that gap. The FAMLI Division states there is no waiting or elimination period at all, so the benefit starts on the first day of leave.
Payment follows quickly too. The first one lands within five business days of the claim being approved or the leave starting, whichever is later, and payments continue at least every two weeks after that.
You are also allowed to make the benefit better. Employers can top off the state benefit to full pay through their own policies, and you may allow employees to add accrued leave, such as paid time off (PTO), to reach 100 percent of wages. That only happens when you permit it and the employee agrees to it.
Who Qualifies for Benefits
An employee qualifies after working at least 680 hours in a position localized in Maryland during the four calendar quarters reported before they apply or their leave begins, whichever comes first. There is no minimum income and no minimum age.
The critical detail for employers is that those hours are not tied to you. They can be accumulated across several jobs, which means a person hired last month can already be eligible on day one, and a long serving employee who recently moved into a Maryland role may not be. This is a sharp departure from how FMLA eligibility works.
Qualifying reasons under Maryland law cover a new child by birth, adoption, foster care, or kinship care placement, the employee's own serious health condition, caring for a family member with a serious health condition, caring for a service member with a service related condition, and arrangements arising from a family member's deployment. Federal employees are excluded from the program entirely.
Employees cannot opt out, and contributions are not refundable if somebody never files a claim. That is the nature of an insurance pool, and it is the single most common question you will get from staff in the first month of deductions. Have the answer ready before the first paycheck lands.
What You Have to Do
Five obligations, and only one of them is writing a check. The rest are registration, reporting, notice, and job protection, and every one of them has a date attached.
Registration is open now, and it is the only one of the five you can finish today. The FAMLI Division takes it online, and in a small company the person who has to sign it is the owner or another officer rather than whoever runs payroll, which is worth knowing before you delegate the task.
The notice requirement deserves more attention than it usually gets, because it repeats. You owe a general notice starting July 2027, a notice one pay period before deductions begin, a notice at hire, an annual notice, a notice when somebody raises the subject of family or parental leave, and a notice when you know an employee is out for a qualifying reason.
Practically, that means the new hire notice belongs in your standard leave documentation and the annual notice belongs on a recurring calendar entry. The FAMLI Division has committed to publishing sample notices. Treating six separate triggers as six separate manual tasks is how a small team misses one.
Job protection is the duty that will surprise employers who have never been under FMLA. You must hold the position and return the employee to the same or an equivalent role, and you must maintain their health benefits while they are out. Neither obligation depends on your size.
The Private Plan Option
Every registered employer is enrolled in the State Plan by default, and the alternative is an approved private plan: either a commercial policy bought from an insurer or a self insured arrangement you fund yourself. Both must be approved by the FAMLI Division and must match or beat the State Plan on benefits and protections.
Employers who want to be exempt from remitting during the seeding year, when contributions build the trust fund before benefits open, file a Declaration of Intent between September 1 and November 15, 2026, and hold contributions in escrow instead of paying the state. Private plan applications open in the summer of 2027 and are due October 1, 2027 (Maryland FAMLI).
The application fee is charged every year, not once. According to the FAMLI Division, it runs from $100 to $1,000 for a commercial plan, scaled by the number of employees localized in Maryland at the moment you apply, and a flat $1,000 for a self insured plan whatever your size. The smallest band, 1 to 14 employees, pays $100.
The State Plan is the cheaper and quieter answer for most small employers without an existing paid leave program. The private route is worth the work mainly when you already run a leave benefit you want to keep and would rather administer it yourself than hand it to the state.
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Kelly KapoorCustomer Service1 personHow FAMLI and FMLA Fit Together
When an event qualifies under both laws, the two leaves run at the same time. An employee does not stack 12 weeks of FMLA on top of 12 weeks of FAMLI, and the FAMLI Division has been explicit about that. Where an event qualifies only for FAMLI, no FMLA entitlement is consumed.
| Question | Federal FMLA | Maryland FAMLI |
|---|---|---|
| Is the leave paid? | No, job protection only | Yes, wage replacement from the state or an approved private plan |
| Which employers are covered? | Private employers with 50 or more employees in 20 or more workweeks of the current or prior year, and every public agency | Every employer with at least one employee working in Maryland |
| How does an employee become eligible? | Tenure and hours with that specific employer | 680 hours in Maryland across the last four reported quarters, from any employer |
| Standard duration | 12 workweeks in a 12 month period | 12 weeks in a rolling benefit year, up to 24 weeks in defined circumstances |
| Military caregiver leave | Up to 26 workweeks | 12 weeks |
| Can you require PTO to be used first? | Employers may require substitution of accrued paid leave | No, paid time off cannot be required before FAMLI |
| Who pays the benefit? | Nobody, the leave is unpaid | The state fund or the approved private plan, not your payroll |
The employer coverage row is where small employers get caught. FMLA never applied to you if you were under the federal size threshold, so you may have no existing leave administration at all. FAMLI applies from your first employee, and it carries job protection with it, which means the reinstatement obligation arrives whether or not you have ever handled one.
Short term disability is a separate calculation again. The FAMLI Division says its benefits are not reduced to account for a short term disability policy, so overlap is possible when leave is for the employee's own condition.
Every Date on the Calendar
The program has been rescheduled more than once, so every line below comes from the state's own published dates, and the state is the only source worth checking them against. The Maryland General Assembly extended the implementation timeline in 2025, which is why so much older guidance is wrong. The top row is the only one every employer can act on today.
The date that trips up payroll is April 30, 2027. Deductions start on January 1, but the money sits with you for a full quarter before the first remittance is due, so it has to be tracked as a liability from day one.
What to Do Before Deductions Start
Most of the preparation is administrative, and almost all of it is cheaper done early than squeezed into the weeks before the first deduction.
Two of those steps produce a record rather than a decision, and both are records nobody will reconstruct later from memory. The notice sheet answers the question of who was told what and when, across six separate triggers. The contribution sheet keeps the withheld money visible as a liability between the deduction and the remittance, which is the gap where it gets spent.
| A | B | C | D | E | F | G | H | |
|---|---|---|---|---|---|---|---|---|
| 1 | Employee | Which notice | What triggered it | Date given | How it was delivered | Given by | Copy filed in the employee record | Next notice due |
| 2 | Replace this row with your first notice | One pay period before deductions, general notice, at hire, annual, on request, or on a qualifying absence | The event that made it due, in your own words | Written or electronic | The annual one is the easiest to lose | |||
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Where Employers Get This Wrong
Five patterns cause most of the trouble, and the first is the expensive one.
The first is assuming a small business exemption applies. There is none. The size threshold reduces what you remit, not whether you participate, and every reporting, notice, and reinstatement duty applies from your first Maryland employee.
The second is working from an outdated timeline. A good deal of published guidance still shows dates the state has abandoned, so verify against the FAMLI Division before you brief anybody.
The third is treating eligibility as a tenure question. The 680 hour test follows the employee across employers, so a new hire can be immediately eligible and you may have no advance warning at all.
The fourth is spending the withheld contributions. Three months of deductions accumulate before the first remittance is due, and that money is a liability from the moment it leaves an employee paycheck.
The fifth is requiring PTO first, and it is the one most likely to become a complaint. You cannot make an employee burn vacation or sick days before claiming, though you can require unpaid leave and an employer parental leave policy to run concurrently.
Nick Anisimov, FirstHR founderMaryland is one of a growing group of states running a payroll funded leave insurance program, and the mechanics rhyme across them. If you employ people in more than one state, the state paid family leave landscape is now a payroll design question rather than a benefits nicety, and the rest of what Maryland asks of employers sits on our Maryland compliance hub.
Your next step is short. Register with the FAMLI Division, decide before the November 15, 2026 Declaration of Intent deadline if you are weighing a private plan, and put the January 1, 2027 start of deductions on your payroll calendar.
Frequently Asked Questions
When does Maryland paid family leave start?
Two different dates matter, and employers keep merging them. Payroll contributions begin January 1, 2027, and the first quarterly payment is due April 30, 2027. Employees cannot claim benefits until January 2028. That gap is deliberate: the contributions seed the trust fund before any money goes out. The Maryland General Assembly moved the timeline for the third time in 2025, which is why so much published commentary still carries older dates. Anything you read that puts contributions in 2025 or benefits in 2026 is out of date, and the FAMLI Division’s own site is the only version worth planning against. One task is already live rather than pending: employer registration is open now, and the state is asking employers to complete it well ahead of the first deduction.
How much does FAMLI cost an employer?
The total contribution is 0.9 percent of covered wages, up to the Social Security cap, on wages paid during calendar year 2027. Up to half of that, 0.45 percent, can come out of employee paychecks, which leaves 0.45 percent as the part you pay yourself. A smaller employer, meaning one with fewer than 15 employees in total (inside and outside Maryland, counted under a single EIN), sends the state only 50 percent of the rate and can withhold the full amount from employee pay, so its direct cost can drop to zero. Under current law the total rate cannot rise above 1.2 percent, and from November 2027 the Maryland Department of Labor announces the rate for the following year each November.
How much will an employee be paid on FAMLI leave?
Up to 90 percent of their wages, with a ceiling of $1,000 per week. The state compares the employee’s average weekly wage against the State Average Weekly Wage. Where the employee’s average weekly wage is 65 percent of the state figure or less, the benefit is 90 percent of their wage. Above that point the benefit is 90 percent of 65 percent of the state figure plus 50 percent of the wages above it, which is how the program pays lower earners a higher replacement rate. To find that average weekly wage, the state takes the highest of the previous four reported quarters and divides it by 13.
Which employers are covered by Maryland FAMLI?
All of them. If even one of your employees holds a position localized in Maryland, you are covered, and that includes a household employer who pays a nanny. There is no small business exemption and no exempt employment category, unlike the state unemployment insurance program. Coverage follows the place the work is actually done rather than where the employee lives or where your office sits, so a remote worker in Maryland on the payroll of an out of state company is covered, and a Maryland resident who works entirely in another state is not. As a shortcut, anyone you already pay Maryland unemployment insurance on counts as covered.
Do employers have to notify employees about FAMLI?
Yes, and more than once. Written notice is required one pay period before payroll deductions begin, again starting July 2027 which is six months before benefits open, at the point of hire, once each year, whenever an employee asks about paid family leave, parental leave, or family leave, and whenever you know an employee is taking time off for a qualifying reason. The FAMLI Division has said it will publish sample notices employers can use. Build the annual and new hire notices into your onboarding paperwork rather than treating each one as a separate reminder, because that is six separate triggers to track.
Can an employer use a private plan instead of the state program?
Yes, through either a commercial insurance policy or a self insured arrangement, and both need FAMLI Division approval and benefits equal to or better than the State Plan. To be exempt from remitting during the seeding year, the first year of contributions, you file a Declaration of Intent in a window that opens September 1 and closes November 15, 2026, and keep the contributions in escrow rather than sending them to the state. Applications for private plans open in the summer of 2027 and must be in by October 1, 2027. Choosing a private plan does not remove the reporting, because quarterly wage and hour reports and claims data both still go to the state. The state also charges an application fee every year rather than once: between $100 and $1,000 for a commercial plan depending on your Maryland headcount, and $1,000 for self insurance.
Does FAMLI leave run at the same time as FMLA?
If an event qualifies under both laws, the two leaves run concurrently, so an employee does not get 12 weeks of FMLA followed by 12 weeks of FAMLI. Some events qualify only for FAMLI, and in those cases no FMLA time is consumed. The two are not interchangeable: FAMLI reaches far more employees because eligibility is based on hours worked in Maryland rather than tenure with you, and it pays wage replacement where FMLA only protects the job. FAMLI also provides 12 weeks for military caregiver leave rather than the 26 weeks available under FMLA. Because FAMLI applies from your first Maryland employee, job protection can reach you years before FMLA ever would.
Can you make an employee use PTO before FAMLI?
No. Employers cannot require employees to exhaust paid time off, sick days, or vacation before using FAMLI leave. You can require unpaid leave to run concurrently, and if you offer a leave policy designed for a FAMLI qualifying reason such as company paid parental leave, you can require that to run at the same time and it counts against the same 12 weeks. The FAMLI Division calls that Alternative FAMLI Purpose Leave. Employers may allow employees to use accrued leave to top off the FAMLI benefit up to full pay, but only if the employee agrees rather than is told to.
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