Maryland Postpones Paid Family and Medical Leave Insurance Initiative and Provides Clarity on Parental Leave Regulations

Maryland Postpones Implementation of Family and Medical Leave Insurance Program

On May 6, 2025, Maryland’s Governor Wes Moore enacted legislation mandating a delay for the inception of the Family and Medical Leave Insurance program (FAMLI). Initially set to commence on July 1, 2025, the program will now begin on January 1, 2027. This new timeline affects both employers and employees in Maryland, who will be required to start contributing to the insurance fund beginning January 1, 2027.

Under the provisions outlined in House Bill 102, the Maryland Department of Labor is tasked with determining the contribution rates for the program. The Department is expected to finalize the contribution rate for the 2027 calendar year before May 1, 2026, and to subsequently announce rates for each following year by November 1 of the prior calendar year. Additionally, Maryland will set a specific date for the acceptance of benefit claims under FAMLI, which is stipulated to be between January 1, 2027, and January 3, 2028.

While the recent legislation has not altered the minimum and maximum benefit amounts for the program—retaining rates of and ,000 respectively through the end of 2028—it does open the door for inflation-adjusted increases to the maximum benefit beginning in 2029. This program aims to provide crucial support for employees facing family-related medical challenges, reflecting a growing trend among states to offer paid leave solutions.

In conjunction with this development, Governor Moore also signed Senate Bill 785, which clarifies the Maryland Parental Leave Act. This bill specifies that businesses in Maryland that fall under the federal Family and Medical Leave Act (FMLA) regulations are exempt from the state’s Parental Leave Act, even if their employee count qualifies them for both programs. The Maryland Parental Leave Act is applicable to businesses with 15 to 49 employees, entitling eligible workers to up to six weeks of unpaid leave for childbirth, adoption, or foster care placement. The federal FMLA, in contrast, applies to employers with a minimum workforce of 50 employees. The new law is expected to eliminate confusion regarding coverage when businesses transition between employee thresholds that would affect their eligibility under both state and federal leave laws. It will be effective starting October 1, 2025.

The transition to a paid family and medical leave program, alongside clearer guidelines for parental leave, demonstrates Maryland’s commitment to enhancing support for working families, a critical aspect of workforce stability and employee well-being. For more comprehensive insights and amendments related to these legislative changes, please refer to our earlier coverage on employment law developments in Maryland.

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