If you have employees who work in Maryland, the new FAMLI program will affect your payroll beginning January 1, 2027. Now is the time to prepare. Here is what you need to know.
What the FAMLI Program Is
FAMLI stands for Family and Medical Leave Insurance. It is a state-run insurance program that provides Maryland workers with paid time off for major life events, such as welcoming a new child, managing a serious illness, or caring for a family member who is seriously ill. It works much like Social Security or unemployment insurance. Employers and employees pay small amounts into a state fund, and eligible workers draw from that fund when they qualify for leave.
The program was created by the Time to Care Act, which Maryland passed in 2022. After several delays, the Maryland Department of Labor finalized the rules in 2026, and the rollout is now set.
The Key FAMLI Dates to Know
Registration with the Maryland FAMLI Division of the Maryland Department of Labor is now open. Employers have until November 15th, 2026, to submit a Declaration of Intent (DOI) if they plan to use a private plan instead of the state program. If you do not, your business will be automatically enrolled in the state plan.
Contributions begin January 1, 2027. You will start withholding a portion from employee paychecks and sending it to the state along with the employer share. Your first quarterly payment is due April 30, 2027. No benefits are paid out during this phase.
Benefits begin January 1, 2028. Eligible employees can file claims and take paid leave.
That means there is a full year where you and your employees pay into the program before anyone can use it. Planning for the 2027 cost now will keep it from catching you off guard.
What FAMLI Costs and Who Pays
The total contribution is 0.9% of wages, split evenly between employers and employees, up to the Social Security wage cap.
How the cost is divided depends on your headcount.
If you have 15 or more employees, the cost is shared equally. You pay 0.45% as the employer and withhold 0.45% from the employee. You may choose to cover the employee share as well, but you are required to pay your own half.
If you have fewer than 15 employees, you receive relief. You are only responsible for remitting 50% of the rate, and you may withhold that amount from employee pay. Handled that way, your direct cost as the employer can be zero.
One important detail: the 15-employee threshold counts all your employees, including those based outside Maryland.
What FAMLI Covers for Your Employees
Beginning in 2028, an eligible employee can take up to 12 weeks of paid, job-protected leave in a year. In limited cases, such as welcoming a new child and managing the employee’s own serious health condition in the same year, an additional 12 weeks may be available.
While on leave, employees may receive up to 90% of their average weekly wage. The percentage is determined by comparing the employee’s average weekly wage to the state average and using the related percentage set by the state. The benefit is capped at $1,000 per week, regardless of salary.
Employees can take FAMLI leave for the following reasons:
- Welcoming a new child, including through adoption or foster care
- Managing their own serious health condition
- Caring for a family member with a serious health condition
- Handling matters related to a family member’s military deployment
To qualify, a worker must have at least 680 hours of Maryland-based work in the prior year, which comes to a little more than 13 hours per week. Part-time, seasonal, and temporary workers can qualify if they meet that threshold.
How to Prepare for FAMLI
There are four steps to get your business ready:
- Register through the state’s FAMLI portal. Registration is already open, and any business with at least one Maryland employee is required to complete it.
- Set up payroll to withhold the employee share, starting with your first paycheck of 2027.
- File quarterly wage reports and submit payments to the state. These are due April 30, July 31, October 31, and January 31.
- Notify your employees about the program and their rights under it.
The FAMLI Private Plan Option
You are not required to use the state plan. Maryland allows employers to use an approved private plan instead, as long as it is at least as generous as the state plan and does not charge employees more than the state would. If you choose this route, you are still required to file quarterly reports with the state.
One thing to keep in mind is timing. To use a private plan, you must submit a Declaration of Intent to the state between September 1 and November 15, 2026. If you miss that window, your business will be automatically enrolled in the state plan.
Whether a private plan makes sense depends on your size, your workforce, and what your payroll or benefits provider already offers. With the November 15 deadline approaching, it is worth having that conversation soon rather than defaulting to the state plan by inaction.
Key Takeaways on the FAMLI Program
The FAMLI program is a big change for any business with Maryland employees. If you want to use a private plan, the Declaration of Intent deadline is November 15, 2026. Contributions begin January 1, 2027, and benefits follow in 2028. Employers who sort out their plan decision, registration, and payroll early will avoid a scramble.
If you have Maryland employees and want help sorting out your FAMLI contributions, your employer size tier, or whether a private plan is right for you, our team here at Lanigan Ryan is here to help you get it right before your first 2027 payroll run.
