Garrett County businesses have an important new employee-benefit program to prepare for as Maryland moves toward implementation of the Family and Medical Leave Insurance (FAMLI) program.
FAMLI is a mandatory statewide program that will provide eligible Maryland workers with paid, job-protected leave for certain family and medical reasons. While benefits will not become available until January 2028, employers need to begin preparing now. Payroll contributions and quarterly reporting requirements begin in 2027.
For Garrett County employers, one of the most important dates to keep in mind is November 15, 2026. Employers considering an approved private FAMLI plan and seeking exemption from State Plan contributions during 2027 must submit a Declaration of Intent by that date.
What is FAMLI?
FAMLI is designed to provide eligible employees with paid leave for qualifying family and medical reasons. Depending on eligibility and circumstances, an employee may receive up to 12 weeks of paid, job-protected leave during a 12-month benefit year. In certain circumstances involving both the birth or placement of a child and the employee's own serious health condition, an employee may be eligible for up to 24 weeks of leave.
Qualifying reasons generally include:
- Welcoming a new child through birth, adoption or foster placement;
- The employee's own serious health condition;
- Caring for a qualifying family member with a serious health condition; and
- Certain circumstances related to a family member's military deployment.
Employees generally must have worked at least 680 hours in Maryland during the four reported calendar quarters preceding a claim or the beginning of leave, whichever occurs first. Hours worked for more than one employer may count toward this requirement.
FAMLI is separate from traditional paid time off. Employers cannot require employees to use vacation, sick leave or general PTO before accessing FAMLI. Employees and employers may, however, coordinate certain existing leave programs with FAMLI under Maryland's rules.
Who must participate?
FAMLI applies broadly. Employers with even one employee working in a position localized in Maryland must register and participate.
Employees working in Maryland-localized positions must participate and cannot opt out of FAMLI payroll contributions, even if an individual employee may not ultimately qualify for benefits.
Employer size is also important. Maryland determines employer size based on the number of employees—not full-time-equivalent positions. Employees inside and outside Maryland who are covered by the same federal Employer Identification Number (EIN) count toward the employer-size threshold. Independent contractors do not count.
For 2027, employers with fewer than 15 employees receive a reduced contribution obligation. However, the lower contribution does not eliminate the employer's administrative responsibilities.
Small employers will still need to register, report wages and hours, make required payroll deductions, provide employee notices, respond to claims and manage job-protected leave.
What will FAMLI cost employers?
Maryland has established an initial State Plan contribution rate of 0.9 percent of wages, up to the Social Security wage cap, for wages paid during 2027.
For employers with 15 or more employees, the contribution is generally split equally between the employer and employee, with each responsible for up to 0.45 percent.
Employers with fewer than 15 employees receive the small-employer contribution reduction and are responsible for remitting 50 percent of the contribution rate. They may withhold that amount from employee pay.
Maryland will establish future State Plan contribution rates annually. The State has indicated that the total contribution rate cannot exceed 1.2 percent of wages. (Maryland FAMLI)
State Plan or private plan?
Employers will automatically participate in Maryland's State Plan after registration, but they may choose an approved private plan instead.
Private plans must provide benefits and services at least equivalent to the State Plan. Commercial private plans are purchased through an insurance company, while self-insured plans are administered by the employer or a third-party administrator and have additional requirements. (Maryland FAMLI)
For Garrett County businesses, the decision should not be based solely on the premium rate. Employers should consider:
- Total cost;
- Employee contribution limits;
- Claims administration and customer service;
- Reporting requirements;
- Administrative support;
- The employer's workforce size and payroll;
- Plan renewal and termination provisions; and
- The level of internal HR resources available to manage leave.
Employers considering a private plan and seeking 2027 contribution relief must submit a Declaration of Intent by November 15, 2026. Private-plan applications are expected to be available in summer 2027 and are due October 1, 2027. (Maryland FAMLI)
Employers that submit a Declaration of Intent will collect contributions during 2027 but hold them in escrow while completing the private-plan process.
Businesses should carefully review the financial consequences of changing plans. Maryland's current guidance includes special provisions for employers whose private plans are terminated during 2028 or 2029, including potential retroactive State Plan contributions, interest and other financial consequences. (Maryland FAMLI)
What should Garrett County businesses do now?
Although FAMLI benefits do not begin until 2028, employers should not wait until then to prepare.
Now through November 15, 2026
Employers should:
- Register each applicable EIN with Maryland FAMLI.
- Identify which employees work in Maryland-localized positions.
- Confirm total employee headcount, including employees outside Maryland who share the same EIN.
- Review the cost of remaining in the State Plan.
- Obtain private-plan information if considering an alternative.
- Complete the Declaration of Intent by November 15 if pursuing a private plan and 2027 contribution relief.
Only an authorized officer can submit the initial employer registration and Declaration of Intent. (Maryland FAMLI)
December 2026 through 2027
Employers should work with their payroll providers to prepare for FAMLI deductions and quarterly reporting, update employee handbooks and leave policies, and establish procedures for responding to FAMLI claims.
Payroll deductions begin January 1, 2027. The first quarterly wage and hour report and contribution payment, covering wages paid January through March 2027, will be due April 30, 2027. Subsequent reports and payments will be due quarterly. (Maryland FAMLI)
Employers should also prepare employee notices and review how FAMLI will interact with existing programs such as the federal Family and Medical Leave Act (FMLA), PTO, sick leave, parental leave, workers' compensation and short-term disability.
January 2028
FAMLI benefits and job-protected leave become available. Employers should have procedures in place to respond to claims, coordinate employee leave, maintain applicable health benefits and return employees to the same or an equivalent position.
The practical challenge for small businesses
For many Garrett County businesses, particularly those with small workforces, the biggest challenge may not be the payroll contribution. It may be managing an employee's absence.
A small business with five, 10 or 14 employees can be significantly affected when an employee takes an extended or intermittent leave. Employers should begin thinking now about cross-training employees, documenting essential job functions and identifying ways to maintain operations when key employees are absent.
FAMLI also may require businesses to rethink how existing leave policies are written. Maryland specifically states that employers cannot require employees to use accrued PTO, vacation or sick leave before taking FAMLI leave. Employees and employers may agree to use accrued leave to supplement FAMLI benefits, while certain employer-provided leave may be coordinated with FAMLI under specific rules. (Maryland FAMLI)
Don't wait until 2027
The implementation of FAMLI will require more than simply adding a payroll deduction.
Garrett County employers should treat the program as a new compliance requirement and establish a responsible person and backup to oversee registration, payroll, reporting, employee communications and leave administration.
Businesses should also monitor Maryland's continuing guidance. Questions involving tax treatment, insurance, payroll, employment law or the selection of a private plan should be discussed with the employer's qualified tax, legal, payroll or insurance adviser.
FAMLI requirements and implementation guidance continue to develop. The information in this article reflects Maryland guidance available as of September 15, 2026, and should not be considered legal or tax advice.
Resources for Employers
Employers can find registration information, contribution requirements, private-plan guidance, leave-management information and other resources through the official Maryland FAMLI website.
Maryland FAMLI – Employer Resources
Understand Your FAMLI Plan Options
FAMLI Contribution Information
FAMLI Leave Management Guidance
