Maryland has enacted legislation that will delay for a third time the implementation of a program that will provide job protection and wage-replacement benefits to employees who need time off from work for certain family and medical reasons.
The Details
By way of background, in 2022, Maryland enacted a law that will entitle employees to job protection and wage-replacement benefits if they need time off from work for certain family and medical reasons. The wage-replacement benefits will be funded by a payroll tax paid by covered employees and employers with 15 or more employees.
The law was subsequently amended in 2023 (by Senate Bill 828) and in 2024 (by Senate Bill 485) to delay implementation and make other changes.
The recently enacted House Bill 102 delays implementation further and clarifies other aspects of the law.
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As Amended by Senate Bill 485
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As Amended by House Bill 102
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Contributions by covered employees and employers with 15 or more employees would have begunJuly 1, 2025.
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Contributions by covered employees and employers with 15 or more employees will now beginJan. 1, 2027.
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BeginningJuly 1, 2026,employees would have been entitled to begin receiving wage-replacement benefits when they take leave for a covered reason.
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By Jan. 3, 2028,employees will be entitled to begin receiving wage-replacement benefits when they take leave for a covered reason. The precise date will be determined by the Maryland Department of Labor — it must be no earlier than Jan. 1, 2027, and no later than Jan. 3, 2028.
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Changes to Other Dates
The delay also affects other dates. For example, the contribution rate for 2027 will now be set by May 1, 2026. For subsequent years, the contribution rate will be set by Nov. 1 of the preceding year.
House Bill 102 also delays optional participation in the program for self-employed individuals until regulations are adopted by July 1, 2028.
The weekly maximum benefit will also be indexed to inflation beginning Jan. 1, 2029, instead of Jan. 1, 2027.
Changes to Definitions
House Bill 102 also adds the definition of “anchor date.” The definition of “anchor date” is the earlier of the date on which: (1) an application for benefits is complete or (2) leave begins for a covered individual for which benefits may be paid.
House Bill 102 alters the definition of “application year” to mean the 12-month period beginning on the Sunday of the calendar week in which the leave begins instead of when benefits are approved.
The definition of a “covered employee” is amended to mean performing services under employment in the state over the four most recently completed calendar quarters for which quarterly reports have been required immediately preceding the anchor date.
A covered employee’s average weekly wage must be calculated based on wages in the highest of the previous four completed calendar quarters that immediately precede the anchor date.
Next steps
Maryland employers should:
- Prepare to comply with the paid family and medical leave requirements by the updated deadlines.
- Communicate the changes to employees.