In 2022, Maryland passed the Time to Care Act to establish a state-mandated family and medical leave insurance program which would provide eligible employees with job-protected paid leave to care for themselves or a family member with a serious health condition, to bond with a child, or to make arrangements for a family member’s military deployment. Under the Paid Family and Medical Leave (PFML) program, eligible employees will be paid up to $1,000 a week for up to 12 weeks (or 24 weeks under certain circumstances) of covered leave. The program will be funded through employer and employee contributions, although employers with fewer than 15 employees are not required to contribute to the program. Contributions to the program fund are scheduled to begin on July 1, 2025, with benefits becoming available starting July 1, 2026. Employers cannot outright refuse to provide paid family and medical leave but may choose between the state’s program or state approved commercial or self-insurance plan. Who are the Mandated Employers; Are There Exceptions? All employers with at least one worker in Maryland will be required to offer paid family and medical leave insurance. However, a sole owner of a sole proprietorship, LLC, C- or S-Corp who is also the only employee of that entity is not required to provide PFML; such employers may opt into the program. Who are the Eligible Employees? Employees who worked at least 680 hours in Maryland during the 12-month period before the leave is to begin are eligible for PFML. How Much Must Employees and Employers Contribute to the State Program? The rate of contributions for the state’s program will depend on the employer’s payroll size; the rate will be 0.90% of covered wages up to the Social Security cap and employers may withhold up to 0.45% of the contribution rate from the employees’ pay. Employers with less than 15 employees will have a rate of 0.45% and may withhold up to the full amount from paychecks. Private plans will set their own rates. What is the Effective Date of the PFML? Contributions are scheduled to begin in July, 2026. However, in February 2025, the Maryland Department of Labor proposed a new timeline for implementation of the PFML program, with Maryland Labor Secretary Portia Wu citing instability and uncertainties of the times; under the proposed timeline, contributions to the fund would begin on January 1, 2027 and benefits would become available as of January 1, 2028. The Maryland General Assembly has yet to take legislative action regarding the proposed timeline. Notification of Employees Employers must notify their employees of PFML when the employee is hired, once a year, and when the employer knows that an employee's leave request may qualify for PFML. What are the Penalties for Non-compliance? The Maryland Department of Labor may order employees to pay the contributions plus interest, twice the amount of contributions withheld, penalties of up to $1,000 per violation, etc. Business To-Dos Review payroll to determine which employees are eligible for PFML Determine whether to opt into the state program or a private program Set up payroll systems to manage applicable employer and employee deductions Submit wage and hour reports each quarter as required by the Maryland Department of Labor Ensure PFML eligibility is properly communicated to employees upon hire and at other required times; consider making changes to employee handbooks if applicable Stay updated on PFML changes, especially regarding dates of contribution and benefit availability