Maryland Paid Family and Medical Leave

At a Glance

• PFML will be funded through a payroll contribution split between employers and employees.
• Contributions begin on October 1, 2024.
• Employee benefits will begin on January 1, 2026.

Introduction

Update: On May 3, 2023, Maryland’s Governor signed SB 0828 into law that modifies certain provisions within the law and also delays the effective date of payroll contributions and benefit payments.

• Prohibits the total rate of contributions from exceeding 1.2% of an employee’s wage.
• Delays the payroll contribution collections date from October 1, 2023 to October 1, 2024.
• Delays the benefits payments from January 1, 2025 to January 1, 2026.

On April 9, 2022, the Maryland legislature overrode Governor Larry Hogan’s veto, which enacts a Paid Family and Medical Leave Law (PFML) for private-sector employers with 15 or more employees. This PFML program will be funded by payroll contributions split between employers and employees. Maryland’s Department of Labor will determine the rates. Payroll contribution deductions will begin on October 1, 2024.

Payroll Contributions

Payroll Contributions will be split equally between eligible employers and eligible employees.

• Each employer with 15 or more employees shall contribute an amount equal to 50% of the total rate of contribution for each employee.
• Each employee of an employer shall contribute an amount equal to 50% of the total rate of contribution.
• An employer may elect to pay the required employee contribution in whole or in part.

The total rate of contribution may not exceed 1.2% of an employees wages and shall be applied to all wages up to and including the Social Security Wage Base.

Employee Benefits

Employees who have worked at least 680 hours over the 12 months immediately preceding the date on which the leave is to begin are eligible for up to 12 weeks annual paid leave for eligible purposes. The benefits replace up to 90% of an eligible employee’s weekly wages or up to $1,000 per week.

Employees may get up to 24 weeks of paid leave if the eligible employee needs medical leave during pregnancy and parental leave after childbirth.
Benefits are set to begin on January 1, 2026.

Acceptable Uses

Eligible employees may take paid leave to:

• Care for a child during the first year after the child’s birth or after the placement of the child through foster care, kinship care, or adoption;
• Care for a family member with a serious health condition;
• Provide leave for covered employees who have a serious health condition that results in them being unable to perform the functions of their position;
• Care for a service member who is the covered employee’s next of kin; or,
• Provide leave for covered employees who have a qualifying exigency because of the deployment of a service member who is a family member of the covered employees.

Family members are defined as:

• A biological, adopted, foster, or stepchild of the covered employee, or child for whom the covered employee has legal or physical custody or guardianship, or for whom the covered employee stands in loco parentis;
• A biological, adoptive, foster, or stepparent of the covered employee or the covered employee’s spouse;
• A legal guardian of the covered employee or ward of the covered employee or of the covered employee’s spouse;
• An individual who acted as a parent or stood in loco parentis to the covered employee or the covered employee’s spouse when they were a minor;
• The spouse of the covered employee; or
• A biological, adopted, foster, or step-grandparent, grandchild, or sibling of the covered employee

For more information on Maryland wage and payroll tax laws, check out our Maryland Wage and Payroll Tax Facts page.

Next Steps

Employers do not need to take any immediate action regarding this PFML requirement as many details are still forthcoming. The agency released FAQs for reference. Paylocity is actively monitoring PFML and will provide updates, particularly as actions become required.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.