Maryland FAMLI Gets Real: Are You Ready?

Contributor: Sarah Hipp, Centro Absence Management Consultant

Maryland’s Family and Medical Leave Insurance (FAMLI) program has seen three implementation delays between 2023-2025, but with the 2026 legislative session now in the rearview mirror, employers who have been anxiously awaiting clarity on guidance and timelines can finally breathe a sigh of relief.  As of late March, the regulations are final, the initial contribution rate is set, and the private plan application window has been established.  With these key elements in place, employers can get off the sidelines and start gearing up for the Maryland PFML rollout.

The Regulations Are Now Final

After an extensive development process, Chapters 1 through 5 of Maryland’s FAMLI regulations are now officially in effect and published in the Code of Maryland Regulations.

Finalization of regulations is a key step in any state PFML implementation as these rules set forth the guidelines that dictate claim processing, compliance, and other key aspects.

Among the key provisions of the final regulations:

• Application Deadlines: Employees must submit a complete claim application with required documentation within 60 days of taking leave. Employers have five business days to respond to a notice from the Division or private plan administration regarding an employee’s claim application.
• FMLA Concurrency: FAMLI leave will run concurrently with FMLA where both apply. If an employee takes FMLA leave for a reason that qualifies for FAMLI, the employee’s available FAMLI leave may be reduced accordingly.  This means employees cannot stack their FMLA and FAMLI benefits to extend job protected time away from work.
• Employer-Provided Benefit Concurrency: Employers may require that employer-provided Alternative FAMLI Purpose Leave (AFPL) run concurrently with FAMLI leave under certain conditions. For general purpose leave, such as PTO, employers cannot require an employee to exhaust any accrued paid time off prior to or during FAMLI leave. These benefits can, however, be used to supplement FAMLI payments up to 100% of the employee’s regular wages.

The Contribution Rate Is Confirmed: 0.9%

The number one question on employers’ minds: how much is this new thing going to cost me? The answer is now confirmed, and the good news is that the rate of 0.9% of covered wages is unchanged from when the state first announced a rate in September 2023. The rate applies to wages up to the Social Security taxable wage base and is split evenly between employers and employees — with each contributing 0.45% of covered wages.

The employer size distinction matters:

• Employers with 15 or more employees: Must remit both the employer and employee shares. Up to 50% may be withheld from employee wages, hence the split rate with each contributing 0.45%. Employers may choose to cover the employee portion if desired.
• Employers with fewer than 15 employees: Exempt from the employer share. Only the employee contribution of 0.45% applies.

To put the cost in plain terms: for an employee earning $1,000 per paycheck, the employee’s share is up to $4.50.  Going forward, the rate will be reviewed and announced each November for the following calendar year, beginning in November 2027.

Contributions do not begin until January 1, 2027, but action is needed now. Payroll systems need to be configured to account for employee withholdings, and employers shouldn’t wait until Q4 to do so—otherwise they may find themselves scrambling at year-end.

The Private Plan Window Opens in Q3 2026

One of the most consequential decisions Maryland employers face between now and the end of 2026 is whether to participate in the state FAMLI administration or pursue a private plan alternative. The FAMLI law allows employers to substitute an approved private plan, either fully insured through an approved carrier or self-insured, provided the plan meets or exceeds the rights, protections, and benefits of the state plan.

The application window for employers who wish to pursue a private plan has now been formally established:

What’s Next?

Maryland FAMLI is no longer a future problem. With final regulations, a confirmed contribution rate, and a defined private plan timeline, conversations can start happening now.  

From private plan evaluation and carrier comparison to payroll readiness, policy alignment, and employee communication — the conversations that happen in the next few months will define how smooth the January 2027 launch is for employers and their workforce.

Centro’s Absence Consulting Team works with brokers to navigate state PFML programs, coordinate leave administration, and build leave strategies that work — for employers and the employees who depend on them.