Maryland Governor Wes Moore has signed an amendment (Senate Bill 828) modifying the 2022 law that established the state’s paid leave system, the Family and Medical Leave Insurance (FAMLI) Program.

The Time to Care Act establishes an insurance-like program for paid leave. Employees and employers will contribute to a shared fund, which will generally pay out up to 12 weeks of paid leave when a qualifying employee requests leave.

Following the amendment, collection of employees’ and employers’ contributions to the FAMLI fund has been pushed back a year and will begin October 1, 2024. Payout of benefits has also been delayed a year and will begin January 1, 2026.

Further, rather than let the Maryland Department of Labor (MDOL) set the contribution rates, as previously envisioned, the modifying law sets the contribution ratio for qualifying employers at 50/50, with employees and employers sharing equally in contributions. Importantly, the new law also caps the total rate of contribution at 1.2% of an employee’s covered wages. In other words, combined contributions cannot exceed 1.2% of an employee’s pre-tax wage base.

The modified FAMLI Program will not require employees to exhaust all of their employer-provided paid sick leave, paid vacation or other paid time off before receiving benefits. Still, employers will have a say in managing the relationship between their employer-provided plans and paid FAMLI leave. If an employee agrees, an employer can pay out portions of the individual’s accrued paid leave in combination with FAMLI leave to provide up to 100% of their average weekly wage.

Finally, the MDOL will promulgate additional regulations by October 1, 2023. These, too, should provide a better idea of the ins and outs of the FAMLI Program. We will provide an update when those regulations are available.