By: HUB's Absence Management Team

What employers with Maryland employees need to do now

Maryland's Family and Medical Leave Insurance (FAMLI) program is finally beginning for employers.

Benefits don't begin until January 2028. Payroll deductions don't begin until January 1, 2027. But the single most consequential decision an employer will make about this program — whether to use the State Plan or a private plan — must be turned into the state between September 1 and November 15, 2026. If you miss that window, it could cost your organization money.

Here is what matters:

The timeline that applies

When What happens
Now Employer registration is open. Registration is required for any employer with at least one Maryland employee.
Sept. 1-Nov. 15, 2026 Declaration of Intent (DOI) window for employers who want to pursue a private plan and avoid remitting contributions to the state during 2027.  The contributions could be put into an escrow fund instead.
December 2026 (approximate) Employers must notify employees one pay period before payroll deductions begin.
Jan. 1, 2027 Contributions begin at 0.9% of wages up to the Social Security wage cap, split evenly between employer and employee.
April 30, 2027 First quarterly wage and hour report and first contribution payment due.
July 2027 General employee notice required (six months before benefits).
Summer – Oct 1, 2027 Private plan applications open; applications due October 1, 2027.
November 2027 State announces the 2028 contribution rate. Statutory ceiling is 1.2%.
January 2028 Benefits become available: up to 12 weeks of job-protected paid leave at up to $1,000 per week.


Register

If you have even one employee working in Maryland, registration is mandatory. There are no exceptions and no size threshold.

Two details catch employers off guard:

  • Only an Authorized Officer can register. That means an owner, partner, CEO, CFO, COO, president, executive director, or someone with equivalent authority under your by-laws. The state requires identity verification through Login.gov, including a Social Security number and a driver's license or state ID.
  • Your payroll vendor, PEO, or broker cannot register for you. Third-Party Agents can be granted access afterward through a Power of Attorney, but the initial registration has to come from inside your organization.

Registration is also one account per federal EIN. Divisions and subsidiaries sharing an EIN register together.

Decide on State Plan vs. private plan — and file the DOI if you're leaning private

Once you register, you are automatically enrolled in the State Plan. Doing nothing is a decision.

If you want to pursue a private plan, you must file a Declaration of Intent between September 1 and November 15, 2026. The DOI is not the application; it is the placeholder that exempts you from remitting contributions to the state during the 2027 seeding year. The actual private plan application opens in summer 2027 and is due October 1, 2027.

Filing a DOI requires a completed Proof of Private Plan Consultation form signed by a licensed Maryland insurance agent or carrier representative.

A few consequences worth understanding before you commit:

  • After a DOI is accepted, you still collect contributions starting January 2027 — but you hold them in escrow rather than remitting them. If your application is later denied or you switch to the State Plan, the escrowed money goes to the state.
  • Private plans may charge employers more than the state rate, but you can never withhold more from employees than they would pay under the State Plan.
  • Approved plans carry a one-year commitment and leaving a private plan for the State Plan during 2028 or 2029 triggers retroactive contributions back to January 1, 2027, plus interest and potential penalties.

Budget the cost — and confirm your employer size

The initial rate is 0.9% of wages up to the Social Security wage base, split 0.45% employer / 0.45% employee, locked in for calendar year 2027.

Employers with fewer than 15 total employees — counted across all locations under the same EIN, not just Maryland — only owe 50% of the total rate and may withhold that entire amount from employees. Independent contractors don't count toward that threshold.

During 2027, size is recalculated each quarter. Starting in 2028, it's a four-quarter average. Employers hovering near 15 employees will want to model both scenarios.

You may also elect to pay the full contribution on employees' behalf. There are tax implications, though, so loop in your tax advisor before deciding what’s best for you.

Determine who is covered

Coverage follows where work is performed, not where the employee lives. The practical test: if you pay Maryland unemployment insurance for that person, they're covered under FAMLI.

This produces some counterintuitive results that multi-state and remote-heavy employers should map now:

  • Lives in Delaware, works in Baltimore → covered
  • Lives in Maryland, works in Virginia → not covered
  • Works remotely from Maryland for an out-of-state employer → covered
  • Works remotely from Pennsylvania for a Maryland employer → not covered

Employees split across states fall under localization rules and require case-by-case analysis. Federal employees working in Maryland are excluded entirely.

Get payroll and reporting ready

Beginning April 2027, every employer — State Plan or private plan — must file quarterly wage and hour reports electronically. Private plan employers must also report claims data. Contributions are due on the last day of the month following each quarter.

Action items for the next two quarters:

  • Ask your payroll vendor directly when Maryland FAMLI deduction codes will be available and whether they'll support the wage and hour report file format.
  • Confirm you can easily provide hours worked for every Maryland employee during the four completed calendar quarters immediately preceding the start of their leave, including part-time, seasonal, and paid interns. The hours worked drive the 680-hour eligibility test, and many salaried-employee payroll setups don't track them cleanly today.
  • If a TPA will handle reporting, register first, then execute the Power of Attorney.

Start redesigning your leave program now

This is the work that takes the longest and gets started the latest.

  • FMLA runs concurrently with FAMLI when both apply. Your designation process and forms need updating.
  • You cannot require employees to exhaust PTO, vacation, or sick time first. You may permit employees to use accrued leave to top off FAMLI benefits to 100% of wages, by mutual agreement.
  • Alternative FAMLI Purpose Leave (AFPL) — company-provided leave designed for a FAMLI qualifying event, such as a paid parental leave policy — can be required to run concurrently. If you offer paid parental leave, review how it's drafted now; the wording determines whether it offsets your exposure or stacks on top of it.
  • Short-term disability does not reduce FAMLI benefits. Employers carrying STD should revisit plan design with their carrier — there is real opportunity to restructure around FAMLI rather than duplicate it.

Job protection and benefit continuation apply throughout FAMLI leave. Employees return to the same or an equivalent position, and health coverage continues.

Build your notice process

Notice obligations are broader than a single poster. Employers must notify employees:

  • One pay period before deductions begin
  • Beginning July 2027, six months ahead of benefits
  • At hire
  • Annually
  • When you become aware leave is for a qualifying reason
  • When an employee requests leave using terms such as “paid family and medical leave,” “parental leave,” or “family leave,” or otherwise indicates they want to take FAMLI leave

Maryland will publish model notices soon.

What to do in the next 60 days

  1. Identify your Authorized Officer and complete registration.
  2. Decide whether a private plan is genuinely on the table — and if there's any chance it is, start the consultation now so the DOI can be filed by November 15. The state has said if you miss this deadline, you will be required to submit contributions to the state even if you decide to use a private plan. 
  3. Model the 2027 contribution cost at 0.9%, including the small-employer test across your full EIN headcount.
  4. Produce a Maryland-localized employee census, remote workers included.
  5. Send your payroll vendor written readiness questions.
  6. Pull your parental leave, PTO, and STD policy language for review against FAMLI's concurrency rules.

View more Absence Management updates on the Absence Management Bulletins page.

NOTICE OF 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.