One year after Maryland’s Paid Family and Medical Leave Insurance Program (“FAMLI”) was established by the Time to Care Act of 2022 (the “Act”), the General Assembly passed SB 828, which modifies multiple provisions of the program. (An overview of FAMLI as initially enacted can be found here.) Gov. Wes Moore signed the bill into law May 3.
Notable Changes to the FAMLI Program
The Act initially required covered employers — those with 15 or more employees — to begin contributing to the FAMLI fund starting Oct. 1. SB 828 has delayed that date by a year, until Oct. 1, 2024. The date employees can start submitting claims for benefits under the Act has also been delayed a year, to Jan. 1, 2026. However, the Maryland secretary of labor is still required to set the total rate of contribution to the fund by Oct. 1, 2023 based on available cost analyses of the FAMLI program. Once the initial contribution rate is set, it will be in effect from Oct. 1, 2024 through June 30, 2026. Beginning in 2026, the rate will be set annually before Feb. 1. The total rate of contribution established under the Act must be applied to all wages up to and including the Social Security wage base and may not exceed 1.2% of an employee’s wages.
SB 828 revises the cost-sharing formula for funding leave benefits under the FAMLI program. While contributions previously were to be split 25/75 between employees and employers, respectively, contribution to the FAMLI fund will now be split 50/50. Employers may still opt to contribute more than 50% to the fund.
The bill also expands the definition of family members under the Act to include domestic partners of a covered employee, as well as the qualifying reasons for FAMLI insurance. Specifically, covered employees may now use FAMLI benefits for the following purposes:
- to care for a newborn child of the covered individual during the first year after the child’s birth or because a child is being placed for adoption, foster care or kinship care with the covered individual or to care for or bond with the child during the first year after the placement
- to care for a family member with a serious health condition
- to attend to a serious health condition that results in the covered individual being unable to perform the functions of their position
- to care for a service member with a serious health condition resulting from military service who is the covered individual’s next of kin
- to attend to a qualifying exigency arising out of the deployment of a service member who is a family member of the covered individual
Covered employees are not required to use or exhaust employer-provided paid leave benefits, such as paid vacation, paid sick leave or other paid time off under an employer policy before or while receiving FAMLI benefits. However, employers may require that FAMLI payments be made concurrently, or otherwise coordinated with, other benefit payments or eligible leave, including leave under the federal FMLA. Notably, employers and employees may agree to use paid vacation, paid sick leave or other PTO while an employee is receiving FAMLI benefits to replace the employee’s wages up to 100% of their average weekly pay during the leave period.
Lastly, while employees taking FAMLI leave are still required to certify whether the leave will be taken on an intermittent or continuous basis, under SB 828, employees are no longer required to certify that they have a “serious health condition that prevents [them] from being able to perform the functions of [their] job” to support their request for leave. It is sufficient for employees to simply certify that they are unable to perform the functions of their position. An employee taking FAMLI leave is still required to give their employer written notice of their intention to take leave at least 30 days before commencing the leave.
What’s Next for Employers?
Assuming the bill becomes law, Maryland employers should note the new dates discussed above and stay tuned for FAMLI regulations, which are expected to be released on or before June 1 by the Maryland Division of Labor and Industry. Although SB 828 effectively delayed the onset of this program for another year, employers can still start taking steps now to prepare for FAMLI to ensure full compliance with the program requirements once it takes effect.
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