This is the first in a three-part series of articles intended to provide readers with an understanding of the Maryland Department of Labor’s (MDOL) final regulations implementing the state’s long-awaited FAMLI program. This article will summarize the regulations covering registration with the FAMLI Division and required notices.
Quick Hits
- Starting no later than January 3, 2028, the FAMLI program will provide most Maryland employees with up to twelve weeks of paid leave for certain family and medical reasons, with a possible additional twelve weeks of leave for parental bonding, per application year.
- The program is funded through employer and employee payroll contributions, which will commence on January 1, 2027, and be administered by the MDOL’s FAMLI Division.
- The final regulations address, among other things, the creation of online employer accounts and mandatory notices.
Background of the Law and Final Regulations
In 2022, the Maryland General Assembly enacted the FAMLI program, designed to provide most Maryland employees with up to twenty-four weeks of partial wage replacement within a twelve-month period—consisting of up to twelve weeks of paid family and medical leave, with the potential for an additional twelve weeks for parental leave. We discussed the detailed requirements of the law in our article, Maryland’s FAMLI Program, Part I: An Overview of the Law. Following several legislatively mandated delays, employer and employee contributions are set to begin on January 1, 2027, with benefits commencing no later than January 3, 2028.
The MDOL previously issued and then re-issued proposed regulations, encompassing five chapters—General Provisions (01), Contributions (02), Equivalent Private Insurance Plans (EPIPs) (03), Claims (04), and Dispute Resolution (05). These chapters establish the regulatory framework governing the establishment, administration, and execution of the FAMLI program by the state, and outline the obligations of employers and employees/claimants. The final regulations, effective March 30, 2026, preserve much of the proposed framework with certain refinements. The final regulations can be found in Title 9, Subtitle 42 of the Code of Maryland Regulations, COMAR 09.42.01-.05.
Key provisions of the regulations related to important definitions, the creation of online employer accounts, and mandatory notices are summarized below. Subsequent articles in this series will address the claims process, leave entitlements, EPIPs, and dispute resolution.
Important Definitions and Qualifying Events
The final regulations set out a comprehensive set of definitions, many of which are generally aligned with terms under the federal Family and Medical Leave Act (FMLA) (e.g., “serious health condition,” “incapacity and treatment,” “continuing treatment,” “licensed health care provider,” etc.). Other significant definitions include the following:
- “Alternative FAMLI purpose leave” (AFPL) means employer-provided leave specifically designated as a separate bank of time off for medical leave, family leave, qualified exigency leave, or under a disability policy, that is not leave provided under an EPIP.
- “General purpose leave” means employer-provided paid leave, such as general paid time off, personal leave, vacation leave, or sick leave, that is not AFPL or leave provided under an EPIP.
- “Fraud” means a misrepresentation or concealment of a material fact made by a claimant that induces the state plan or an EPIP to provide benefits when the claimant would have otherwise not qualified.
- “Complete claim application” means an application submitted by a claimant with all required supporting documentation, including the employer’s response and any investigation.
- “Good cause” for late filing is defined to cover a serious health condition resulting in unanticipated incapacity that prevented timely filing, a demonstrated inability to access a means to file, or a demonstrated failure of the employer to provide the required notification.
Qualifying events under the final regulations mirror those under the FMLA: the employee’s own serious health condition; a family member’s serious health condition (with a much broader definition of “family member” than under the FMLA); bonding time following the birth, adoption, foster care, or kinship care placement of a child; caring for a service member with a serious health condition who is next of kin; and qualifying exigencies arising from the deployment of a family member who is a service member. Notably, the definition of “family member” extends beyond how the FMLA defines parent, child, and spouse to include domestic partners, grandparents, grandchildren, siblings, and individuals who stand in loco parentis, among others. In addition, “serious health condition” also includes donation of an organ, body part, or tissue.
Online Accounts, Forms, and Contributions
Employers must create and maintain an online account through which they will submit required quarterly wage and hour informational reports, remit contributions on a quarterly basis, and engage in FAMLI-related communications with the state. The MDOL may require employers, employees, and EPIPs to use approved templates and forms in connection with notices, claims, and dispute resolution. These templates and forms will be provided at a later date.
Contributions are based on “qualified employment,” which is determined first by whether Unemployment Insurance (UI) contributions are made on the employee’s behalf to Maryland; if UI is paid to another state, the employment is not qualified. If UI is not due to any jurisdiction, employment may still qualify under UI’s localization rules, which reviews factors such as where the work is performed, the incidental nature of work performed in any particular location, and the employer’s base of operations.
The rate of contribution is set annually by the state, and contributions may be evenly split between the employer and employee, with the exception of state-authorized small employers (those with fewer than fifteen employees). Employers may also elect to cover the entire contribution on behalf of employees as an added benefit. Employers that elect to cover employee contributions may also do so for select groups of employees, or all employees. Employers that elect this benefit may want to consult with a tax professional regarding fringe benefit tax implications.
Written notice must be provided to all employees of at least one pay period before the commencement of contribution withholdings and before any subsequent changes. If an employer fails to deduct an employee’s share of the contributions, the employer is deemed to have elected to pay the employee’s contribution and may not retroactively recoup; however, when an employee’s paycheck lacks sufficient funds for the contribution due to higher-priority withholdings, the employer may recoup the missed employee share within the next six pay cycles.
Employers have a thirty-day cure period for contribution delinquencies. Interest accrues at a rate of 1.5 percent per month on unpaid contributions, and the FAMLI Division may assess up to two times the delinquent contributions as a penalty and order an audit. For missing or incomplete wage reports, the division may estimate wages and assess contributions, subpoena records, and order an audit.
If there has been a contribution overpayment, employers have one year to request reimbursement. Employee shares must be returned within ninety days of receipt of any reimbursement; if those employees cannot be found, the amounts are remitted to the state for safekeeping.
Notices: Employer, Employee, and Plan Obligations
Employer notice requirements: Employers must provide FAMLI notice, using the FAMLI Division-mandated template, at certain specified points in time: six months before the commencement of benefits; at hire; annually; thirty days before any changes to the employer’s FAMLI procedures or plan; and when the employer knows that an employee’s leave or leave request may be eligible for FAMLI.
Employee notice requirements: Employees must provide their employers with thirty days’ notice of the need for foreseeable leave or, for unforeseeable leave, as soon as practicable. Employers may waive this requirement and will be deemed to have waived it if they did not invoke it when notified of the claim or failed to notify the claimant that notice is required. For intermittent leave, employees must make a reasonable effort to schedule leave in a manner that does not cause “significant difficulty or expense” in relation to the employer’s resources and operations, and must also provide reasonable and practicable prior notice of the reason, dates, and duration. Employers may apply established absence policies when recipients fail to provide reasonable notice of intermittent leave, but an employer must notify the FAMLI Division before taking action against the employee. If a recipient’s utilization of intermittent FAMLI leave is inconsistent with the leave approval, the employer is permitted to request additional information from the employee.
Plan notice requirements: Plans (whether the state plan or an EPIP) also have notice requirements, including when: an application is submitted; an application is incomplete; an employer is notified; the employer responds; the application is approved (with benefit amounts, leave periods, intermittent leave parameters, and appeal rights); or the application is denied (with reasons, appeal rights, the factual basis or issues involved, applicable statutory and regulatory sections, and reconsideration rights and timing). Plans must also notify employers when: an application is submitted and is completed, a claims determination is made, a reconsideration or appeal is filed, and a change is made to a determination.
Next Steps
The final regulations took effect on March 30, 2026. Employers may wish to begin preparing for the forthcoming implementation of the FAMLI program by signing up for email updates from the state and registering for an online account once the state has made that available. In addition, they may wish to consider the economic impact of the contributions, which begin on January 1, 2027, on financial planning. Stay tuned for the next two entries in this series, covering claims, EPIPs, and dispute resolution.
