The Maryland Department of Labor announced that it has published final regulations governing the state's paid family and medical leave insurance (PFMLI) program and has also provided other details concerning the program's upcoming implementation.

Employers begin making contributions to the program starting January 1, 2027, and employees can begin receiving PFML benefits effective January 1, 2028.

Background

On April 9, 2022, the Maryland legislature enacted SB 275, establishing a statewide PFLMI program designed to provide eligible employees with paid, job protected leave for specified family and medical reasons, funded through payroll contributions from employers and employees (Tax Alert 2022-0686.)

Since enactment, the program's implementation timeline has been delayed twice by subsequent legislation, reflecting the state's effort to allow additional time for regulatory development, system readiness and employer preparation. First, Maryland delayed the original contribution and benefits start dates through legislation enacted in 2023. (Tax Alert 2023-1029.) More recently, legislation moved the contribution start date to January 1, 2027, with benefits scheduled to become available no earlier than January 2028. (Tax Alert 2025-1335.)

Benefits

Starting January 1, 2028, eligible Maryland employees will be entitled to up to 12 weeks of paid, job-protected leave for qualifying family or medical reasons, including caring for a new child, addressing a serious health condition, caring for a family member with a serious health condition, or responding to certain military related exigencies. Employees may be eligible for an additional 12 weeks of paid leave in limited circumstances when both personal medical leave and parental bonding leave are taken in the same year.

Contributions

The program is financed by mandatory payroll contributions, with the total contribution rate for 2027 set at 0.9% on wages up to the annual Social Security wage limit. The contribution rate is split evenly between employees and employers with 15 or more employees, while employers with fewer than 15 employees are exempt from the employer portion of the contribution.

Employee notice requirements

Employers are required to notify employees about Maryland's PFMLI program on all of the following occurrences:

• One pay period before payroll deductions begin
• Starting July 1, 2027 (six months before benefits begin)
• When the employee is hired
• Once a year
• When the employee requests PFMLI benefits
• When the employer knows the employee is taking leave for a qualifying reason

Ernst & Young LLP insights

Although contributions do not begin until 2027, employers should use the extended implementation period to assess payroll system readiness, evaluate private plan options and develop plans for required employee communications. Early preparation can reduce operational disruption and support a smoother transition as Maryland's PFMLI program becomes operational.