Contributions

Once the option is launched, self-employed individuals may choose to register themselves in order to contribute and be eligible for benefits. Details will become available at a later date.

Yes, all employers with at least one employee in Maryland will be required to provide paid family and medical leave. There are no exemptions under state law. Employers can choose between the State Plan, a commercial plan, or a self-insured option.

FAMLI is funded through contributions that employers will remit to the State on a quarterly basis. The contribution amount is based on payroll. Employers may withhold up to 50% of the total contribution rate from employees’ paychecks.

The contribution period will begin on January 1, 2027. This means payroll deductions will begin on January 1, 2027 and employers will remit the first payment to the State in April 2027.

The contributions employers remit to the State will create a trust fund. The fund will grow over time and be ready to pay out benefits to employees in Maryland starting January 2028.

In April 2026, MD Labor reaffirmed a total contribution rate for FAMLI of 0.9%. This rate will apply when payroll withholding begins on January 1, 2027, for wages paid between January 1, 2027 to December 31, 2027. Each November, starting in 2027, MD Labor will announce a contribution rate for the following calendar year. Under current law, the total rate cannot go over 1.2% of wages up to the Social Security cap. Employers may withhold up to half the contribution rate (0.45%) from their employees’ pay. Small employers (those with fewer than 15 total employees, counting employees within and outside of Maryland), will only be responsible for remitting 50% of the contribution rate. They may withhold that amount from their employees’ pay. While MD Labor sets the contribution rate for all participants in the State Plan, private plans will set their own rates. Employees can’t be charged more in a private plan than they would be through the State Plan.

The total contribution rate is 0.9%. Employers may withhold up to half of that rate, 0.45%, from their employees. You could withhold $225 per year from an employee making $50,000 a year ($50,000 x 0.0045 = $225)

No.

The FAMLI Division has no control over payroll software. The Division anticipates that vendors will adapt and offer solutions.

Yes, employers can choose to pay the full contribution amount. Please note, there may be tax implications for doing so. Employers should consult with a tax professional.

Yes. Employers may decide to cover the cost of contributions for a select group of employees. Please note, there may be tax implications for doing so. Employers should consult with a tax professional.

You may want to discuss the [IRS Revenue Ruling 2025-4](https://www.irs.gov/irb/2025-07_IRB#REV-RUL-2025-4) with your accountant. It includes a section on tax implications for employers who pay some or all of employee contributions.

The total number of employees includes those employed both within and outside of Maryland. Initially, the FAMLI Division will determine the total number of employees for each individual quarter. After an employer has a full calendar year of reported quarters, the Division will use the employer's average across the 4 quarters to make a determination for the subsequent calendar year.

You may report your total employee headcount on your Quarterly Wage and Hour Report (QWHR). The total includes both employees within and outside of Maryland. If the total is below 15, you will qualify for the small employer discount.

The FAMLI Division will collect wage and hour reports every quarter. Until the Division receives a full calendar year of wage and hour reports, the Division will determine employer size each quarter. After the Division receives a calendar year of reports, the Division will average the number of employees paid each quarter for the calendar year and make an annual determination that will apply for the entire year following.

No, employer size will be based on the number of employees reported for the entity whose EIN is registered and used to report wages.

If a worker is determined to be an independent contractor based on the ABC test, they will not count toward employer size. In order to make a determination under the ABC test you start with the presumption that any worker you compensate is presumed to be an "employee" and therefore covered by FAMLI unless all of these are true: A. The worker is free from the direction and control of the employer; B. The worker is customarily engaged in an independent business of the same nature as that involved in the work being done for the employer; **and** ** C. The wo**rk is outside the usual course of business of the employer for whom it is performed OR the work is performed outside any place of business of the employer for whom it is performed.

All employees in Maryland will owe contributions. FAMLI is using the test Unemployment Insurance uses to determine if a worker is an employee. The test is known as as the "ABC test". The IRS uses a slightly different test. In many cases, 1099 workers will not fall into the employee category but in some cases they will. In order to make a determination under the ABC test you start with the presumption that any worker you compensate is presumed to be an "employee" and therefore covered by FAMLI unless all of these are true: A. The worker is free from the direction and control of the employer; B. The worker is customarily engaged in an independent business of the same nature as that involved in the work being done for the employer; **and** C. The work is outside the usual course of business of the employer for whom it is performed OR the work is performed outside any place of business of the employer for whom it is performed.

When an employer registers with FAMLI, they will enter their federal Employer Identification Number (EIN). All sub-agencies and divisions with that same EIN will therefore be registered. FAMLI will only allow one registration per EIN. All employees falling under the same EIN are counted toward a single employer-size.

Each November, the FAMLI Division will announce a contribution rate for the following year. It may change over time, but under current law, the total rate cannot go over 1.2% of wages up to the Social Security cap.

Employers will submit wage and hour reports each quarter. Those reports will determine how much an employer contributes.

Employers will be responsible for filing quarterly wage and hour reports with the FAMLI Division. These reports will be the basis for calculating the amount due each quarter and to determine employee eligibility. Employers will be required to electronically file these reports, even if they participate in a private plan.

Yes, information on reporting requirements can be found in the Quarter Wage and Hour Report File Guide, accessible on FAMLI's website: <https://paidleave.maryland.gov/files/qwhr-file-guide.pdf>

The definition of wages is the same as that used for the purposes of unemployment insurance (Labor and Employment Article, §8.3-101(r), Annotated Code of Maryland).

Employers will report gross wages on quarterly wage and hour reports.

If an employer chooses to collect up to half of the contribution rate from employees, the employer must collect the employee's portion of the contribution through payroll deductions at the time wages are paid. Employers will be responsible for electronically remitting contributions to the State through the FAMLI Division’s website (the website is currently under construction).

No. Employers will remit FAMLI contributions via the FAMLI website. This website is separate from Maryland's Unemployment Insurance program.

Employers will remit contributions to the State every three months (on a quarterly basis).

Payroll deductions begin on January 1, 2027 and the first quarterly payment is due April 30, 2027. Moving forward, this is the schedule for quarterly contributions: For the quarter beginning January 1 and ending March 31: contribution due April 30 For the quarter beginning April 1 and ending June 30: contribution due July 31 For the quarter beginning July 1 and ending September 30: contribution due October 31 For the quarter beginning October 1 and ending December 31: contribution due January 31

No, employers are not allowed to collect contributions from employees after the pay cycle ends. There is one exception. If an employee does not earn enough in a pay cycle to cover their contribution (for example, a tipped employee), the employer has up to 6 pay periods to collect the money.

If an employee does not earn enough on a paycheck to cover their contribution amount, their employer has up to 6 pay periods to collect the money. This is the only reason an employer can collect contributions from employees after they are due. The employer could also pay the difference.

When an employee earns zero wages, no contributions are due but the employer's reporting responsibility remains unchanged. Employers are still required to submit quarterly reports indicating the employee earned zero wages.

This means that any wages over the Social Security wage cap will not count toward an employee's contribution. For example, the 2026 cap is $184,500, so any money an employee earns over that amount will not count toward contributions. More information about the Social Security wage cap can be found here: <https://www.ssa.gov/benefits/retirement/planner/maxtax.html>

The cap on wages is determined separately for each job.

Employers will need to make and collect contributions for employees working in a position localized in Maryland. Employees cannot opt out of participating.

It depends on the structure of the company. If the owner is an employee of the company (i.e. receives wages) they will need to contribute to FAMLI and will be eligible for benefits. If the sole owner of an S corp is the only person employed by the S corp, for the purposes of FAMLI the owner is not considered an employer. Only employers are required to register with FAMLI. Once the self-employed option is launched, self-employed individuals may choose to register themselves in order to contribute to FAMLI and become eligible for benefits. Details regarding this option will be available at a later date.

Yes, the law does not exclude any group of employees.

If an employee is localized in Maryland, they are covered under FAMLI. There are detailed localization rules, but a shorthand rule is that if they are covered under Maryland's Unemployment Insurance program, they are also covered under FAMLI.

It depends on whether the position is localized in Maryland. Only positions localized in Maryland will be responsible for contributions and eligible for benefits. There are detailed localization rules, but a shorthand rule is that if a position is covered by Maryland’s Unemployment Insurance program, it is also covered under FAMLI.

No. All employment categories are covered by FAMLI. There are no exemptions.

No, there is not a reimbursable option similar to the one offered under the unemployment insurance program.

Employers in the State Plan will not be individually charged more depending on their employees’ usage. Private plans may be structured differently.

Please contact the Maryland Department of Health.

No. Like other insurance programs, FAMLI contributions go into a shared fund that is used to pay benefits.

No. Contributions will only be due and benefits will only be available during employment.

The FAMLI Division understands that many employers will rely on TPAs to interact with our system. Our website is being built with that in mind.

No, by law the FAMLI Trust Fund may only be used for the purposes of FAMLI.

Once an employer’s private plan is approved they will not need to make contributions to the State Plan, but the employer will still be required to provide quarterly wage and hour reports.

Employers with an approved private plan must stay in that plan for one year. If they decide to switch to the State Plan after that year, they will need to begin collecting and remitting contributions to the State Plan. Employees will immediately be able to file claims through the State Plan.