By: HUB's Absence Management Team

On April 10, 2023, the Maryland legislature passed Senate Bill 828, which makes modifications to the Maryland Family and Medical Leave Insurance Program that was passed in 2022. Governor Wes Moore signed the bill into law on May 3, 2023.

Background

On April 9, 2022, the Maryland General Assembly overturned a veto by former Governor Hogan to pass the Maryland Time to Care Act into law, establishing a Family and Medical Leave Insurance Program for workers in Maryland.

Eligible Employers

This law applies to all employers with at least one employee in the state of Maryland.

Eligible Employees

All employees in the state of Maryland who have worked at least 680 hours over the 12-month period immediately preceding the date on which leave is to begin. Self-employed individuals may also opt-in to the program.

Leave Entitlement

This law provides eligible employees with 12 weeks of paid, job and benefit protected leave:

  1. 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;
  2. to care for a family member with a serious health condition;
  3. because the eligible employee has a serious health condition that results in the employee being unable to perform the functions of their job;
  4. to care for a service member who is the employee's next of kin;
  5. because the employee has a qualifying exigency arising out of the deployment of the employee's family member

Commencing January 1, 2025, the weekly benefit amount will be at least $50 and not exceed $1,000. For every subsequent year, the benefit amount will be determined by the state Secretary of Labor based on a number of economic factors.

Employees taking leave under this law will be entitled to maintain health benefits provided through their employer and job restoration benefits upon return from leave.

Program Funding

The program will be funded through payroll taxes by both the employer and the employee. Employers with at least fifteen or more employees, and each self-employed individual participating in the fund will contribute.

Program Administration

The program will be administered by the Maryland Department of Labor. Employers may satisfy the requirements of the law through a private employer plan consisting of employer-provided benefits, private insurance, or a combination of both, so long as they are offered to all employees and meet or exceed all the rights, protections, and benefits provided under the law.

Modifications under SB828

Some of the changes made under this bill are:

  • Delays the start date for benefits payments to covered employees to January 1, 2026.
  • Delays the start date for contributions to October 1, 2024.
  • Clarifies the definition of wages to include an employee's hourly wage, commission, compensatory pay, severance pay, standby pay, tips or gratuities, holiday or vacation pay, or any other paid leave that is paid to the employee entirely by the employer.
  • Establishes 1.2% of an employee's wages as the maximum rate of contribution.
  • Establishes the contribution split between employer and employee as 50/50.
  • Adds domestic partner to the definition of family member.
  • Changes rules about the use of company paid time off.
    • Under the new law, employees will not be required to exhaust all paid leave before receiving benefits under the Maryland Family and Medical Leave Insurance Program.
    • Employees will be allowed to supplement their benefits with paid time off to cover their wages in an amount not to exceed 100%.
    • Employers will be allowed to require that benefits under the Family and Medical Leave Insurance Program are coordinated with employer provided leave policies such as parental leave or short-term disability.

This list is not exhaustive of all modifications made under SB828. For more information, the full text of the law can be found here.

Disclaimer: Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization's specific circumstances. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization's specific situation in light of your organization's particular needs.