Maryland FAMLI Is Here: What Employers Should Be Doing Now

Maryland’s Family and Medical Leave Insurance (FAMLI) program is getting closer to launch. If you are an employer with even one employee working in Maryland—whether full time, part time, or seasonally—you’ll be required to provide paid family and medical leave. If you’re considering an equivalent private plan, you may also need to submit a Declaration of Intent by November 15, 2026, to avoid State Plan contributions during the 2027 seeding period. Payroll withholding begins January 1, 2027, with benefits scheduled to start in January 2028.

FAMLI is more than a payroll deduction and preparation will require input from leadership, payroll, finance, human resources, legal counsel, and outside advisors. Business owners and HR managers can start by confirming who is covered, assigning responsibility, and deciding whether the State Plan or an approved private plan best fits their organization.

A Quick Look at How FAMLI Works

FAMLI will provide eligible employees with up to 12 weeks of paid leave with job protection for qualifying family and medical needs. These include welcoming a child, caring for a family member, managing an employee’s own serious health condition, and addressing certain needs related to a family member’s deployment. Benefits are scheduled to begin in January 2028.

Start with Registration and the Right Person, but Don’t Wait

If you have at least one employee working in Maryland, an authorized officer, such as an owner, partner, president, CEO, CFO, or executive director, must register your organization by November 15, 2026. Employers considering a private plan must also take the required action by that date. After registration, your payroll provider, CPA, or HR consultant can help manage filings, contributions, claims, and other responsibilities, but they cannot complete the initial registration for you.

Choose Your Plan and Get Payroll Ready

For employers participating in the State Plan, employee contributions will begin coming out of payroll on January 1, 2027. The initial total contribution rate is 0.9% of covered wages, up to the Social Security wage cap, and employers may withhold up to 0.45% from employees. Employers with fewer than 15 total employees, including employees outside Maryland, only need to remit the employee share. They must still register, file quarterly reports, and submit contributions.

Employers may choose the State Plan or a commercial or privately funded plan. Compare cost, administrative workload, benefit design, claims management, approval requirements, and workforce needs. Private plans must provide benefits and service equal to or better than the State Plan and receive FAMLI Division approval. If you plan to pursue one in 2027, determine whether the November 15, 2026, Declaration of Intent deadline applies.

Don’t Overlook the Budget and Tax Questions

Finance and payroll teams should model employer contributions, system changes, quarterly remittances, and cash flow timing in the 2027 budget. If your organization will pay any employee contribution, ask your tax advisor about payroll tax treatment, compensation reporting, deductibility, and coordination with existing benefits. Maryland cautions that these payments may have tax implications.

Your FAMLI Readiness Checklist

Not sure where to begin? Work through these steps in order: 

• Confirm coverage. Ask HR and legal counsel to identify everyone working in Maryland, including remote employees, and resolve any questions about workforce size that could affect your contribution responsibilities.
• Choose an account owner. Leadership should designate the authorized officer who will register and approve access for internal staff or outside agents.
• Select a plan. Leadership, HR, and advisors should compare the State Plan with commercial or privately funded options and document how the decision was made.
• Complete registration. The authorized officer should register the organization and, if applicable, submit the Declaration of Intent for a private plan by November 15, 2026.
• Prepare payroll. Payroll and finance teams should configure deductions, employer contributions, treatment of the wage cap, and employee notices before January 1, 2027.
• Build it into the budget. Include expected contributions, implementation costs, and quarterly cash requirements in your 2027 budget and forecasts.
• Review policies. HR and legal counsel should revisit leave policies, employee handbooks, procedures for job protection, continuation of health benefits, and related benefit programs.
• Plan employee communications. Prepare required notices and clear guidance before deductions begin, then add annual notices and notices triggered by specific events to your regular HR processes. This process must be completed by January 1, 2027.
• Assign reporting responsibilities. Decide whether payroll, finance, or an outside agent will handle quarterly wage and hour reports and contribution remittances beginning April 1, 2027.

The Bottom Line

FAMLI benefits may not begin until 2028, but preparation starts now. Naming an authorized officer, choosing a plan, and reviewing payroll, budgets, policies, and communications can help your organization avoid a scramble at the last minute. Now is the time to bring your payroll, HR, legal, and tax advisors into the conversation.