Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Approximately one year ago, the Maryland General Assembly passed the Time to Care Act of 2022 (SB 275/HB8). Maryland became the eleventh state1 (in addition to the District of Columbia) to adopt a statewide family and medical leave program (the “Program”). The Maryland General Assembly recently concluded its 2023 session and passed modifications to the Program. The governor approved the modifications on May 3, 2023.
The Program applies to all employers with at least one employee in Maryland and is funded by contributions from employers and employees. Eligible employees may receive up to 12 weeks of paid family and medical leave per benefit year for any single reason under the Program. These reasons include: (1) care for or bond with a newborn child or child newly placed for adoption, foster care, or kinship care; (2) care for a family member with a serious health condition; (3) attend to an employee’s own serious health condition that prevents the employee from performing functions of a position; (4) care for a next of kin military service member with a serious health condition resulting from military service; and (5) attend to quality military exigencies.
Employees are generally limited to receiving 12 weeks of paid family and medical leave per benefit year in the aggregate, except that eligible employees may receive 12 weeks of parental leave in addition to up to 12 weeks of paid family and medical leave benefits for other reasons in the same benefit year, bringing the total possible amount of paid leave to 24 weeks. The original legislation provided that contributions were to begin on October 1, 2023, and employees would be able to begin using Program benefits on January 1, 2025.
The Maryland legislature made the following notable changes to the Program:
- Delayed implementation: Contributions to the Program will now begin for both the employer and employees on October 1, 2024. Eligible employees may begin to use Program benefits on January 1, 2026.
- Contribution split: Contributions to the Program will be split 50/50 between employers and employees.2 However, employers may choose to pay more than 50 percent (up to the entire portion required for employees).
- Contribution rate cap: Program contributions may not exceed 1.2% of an employee’s wages and will be applied to all wages up to and including the Social Security wage base. Contribution rates will be set on or before October 1, 2023. The initial contribution rate that goes into effect on October 1, 2024, will be in place until June 30, 2026. Thereafter, contribution rates will be set on an annual basis on or before each February 1, and that rate will be in effect for a 12-month period beginning on July 1 of the same year.
- Interaction with other laws and leaves: If paid leave taken under the law also qualifies as protected leave under the FMLA, the paid leave taken will run concurrently with, and not in addition to, such protected leave. On the other hand, the modifications to the Program clarify that covered employees may not be required to exhaust or use certain paid leave benefits (e.g., vacation, PTO, and sick leave) before or while receiving Program benefits.
- Added definition of “wages”: The revised legislation adds a definition of “wages” to include hourly wage or salary; commission; compensatory pay; severance pay; standby pay; tip or gratuity; holiday or vacation pay; and any other paid leave, including sick leave (paid entirely by employers).
- Expanded definition of “family member”: Domestic partners of a covered employee are now included as a covered “family member” for purposes of the Program.
The implementing regulations are expected to be issued by January 1, 2024, giving employers additional time to prepare for the Program.
Employers should take advantage of this time to identify covered employees, prepare their payroll systems to include any additional payroll tax, and to consult experienced Maryland employment counsel to review current paid time off, leaves of absence, and family and medical leave policies to account for these new requirements.
Littler will continue to monitor the effects of this new law and the status of regulations.
1 The other ten states with paid family and medical leave programs are California, Colorado (benefits available 1/1/2024), Connecticut, Massachusetts, New Jersey, New York, Oregon (benefits available 9/3/2023), Rhode Island, and Washington. In addition, subsequent to Maryland’s passing its law, Delaware also passed the Healthy Delaware Families Act (benefits available 1/1/2026).
2 Employers with fewer than 15 employees are not required to pay employer contributions. Their employees are still required to pay contributions and will still be entitled to benefits under the Program.