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Maryland Passes Paid Family and Medical Leave

Maryland is the latest state to pass a paid family and medical leave (PFML) insurance program (“Time to Care Act”) which was vetoed by Governor Larry Hogan on April 8, but was overridden by the state legislature on April 9. Contributions are to begin on October 1, 2023, and benefits will be paid starting January 1, 2025.

Employer Coverage

The program will cover all employers with Maryland employees, including state and governmental entities. However, employers with less than 15 employees are not required to make employer contributions to the program.

Self-employed workers may also elect to participate in the program.

Employee Coverage

All workers who have worked at least 680 hours during the previous year will be eligible for PFML.

Leave Entitlement

Covered employees will be entitled to take up to 12 weeks of paid leave to:

  • Care for a newborn child or a child newly placed for adoption, foster care or kinship care during the first year after the birth, adoption or placement;
  • Care for a family member with a serious health condition;
  • Attend to a serious health condition that results in them being unable to perform their job functions;
  • Care for a next-of-kin servicemember; or
  • Attend to a qualifying exigency arising out of a family member’s deployment.

Leave may be taken intermittently if required, and the employee must make a reasonable effort to schedule the leave so as to not unduly disrupt the employer’s operations. The employee must also provide reasonable and practicable prior notice of the reason for the need for intermittent leave. Intermittent leave must be taken in increments of at least four hours.

It is important to note that employees will be required to exhaust all employer-provided leave before receiving benefits under PFML. Leave will run concurrently with FMLA leave, if applicable.

Covered Family Members

Covered family members include:

  • A child, as well as one for whom the employee has legal or physical custody or guardianship, or for whom the employee stands “in loco parentis,”
  • A parent, as well as the legal guardian of the employee or the employee’s spouse, or who acted “in loco parentis” to the employee or the employee’s spouse when they were a minor,
  • A spouse,
  • A grandparent,
  • A grandchild, or
  • A sibling.

Leave Benefits

Workers will receive up to 90% of their average weekly wages during leave, ranging from $50 up to a maximum of $1,000. These levels will adjust for inflation every year.

Contributions

Contributions will be shared by the employer and employee, and are set to begin October 1, 2023, with employees being eligible for leave benefits in 2025. The contribution rate is yet to be determined by the state’s Labor Secretary, but it while be a percentage of employees’ Social Security wage base which is supposed to be set by June 1, 2023. The Secretary will also determine how the contribution will be split between employers and employees, and it is expected to range between 25% and 75% for each.

For employers in certain industries (including community-based agencies or programs funded by the Behavioral Health Administration, the Developmental Disabilities Administration, or the Medical Care Programs Administration), the state will pay the employer’s contribution. The state will also pay the employee’s contribution for employees earning less than the minimum wage (currently $15/hour) through June 30, 2026.

Benefits During Leave

During the leave, employers are required to maintain health care benefits consistent with the requirements under FMLA.

Notice Requirements

Employers will be required to provide written notice to each employee on their rights under the law at the time of hire and then annually. The notice must also be provided within five business days of an employee’s request for leave or upon learning about the need for leave. There are specific requirements that must be contained in the notice, and the state will develop standard notices that can be used by employers.

Reinstatement Rights

Upon return from leave, employees generally must be reinstated to their position at the end of the leave, with two exceptions (1) if the employee is terminated for cause, or (2) if restoring the employee to their position would result in “substantial and grievous economic injury to the operations of the employer.”

Exceptions

Employers may substitute their own leave plans to comply with the law, as the law contains an exemption for employers with a “private employer plan” consisting of benefits and/or insurance that is available to all eligible employees and that meets or exceeds all of the rights, protections and benefits under the program. The plan must be filed with and approved by the state.

Additional Information

Guidance in the form of regulations from the Maryland Department of Labor is expected by June 1, 2023.

Next Steps for Employers

There are currently several unanswered questions around the practical and economic details of program, so employers will need to wait for key items such as determination of contributions, the claims process and applicable leave forms to be addressed via regulations and guidance from the state before taking any major steps to comply.

In the interim, employers should continue to monitor this law and review what paid leave benefits they are currently offering and whether adjustments may need to be made, especially where an employer intends to substitute their own leave plan to meet the requirements under the law.

Employers should continue to monitor the program’s progress and be prepared to comply as the effective date draws closer.

HR Works will continue to monitor this topic and provide updated information as it becomes available.

HR Works, Inc., headquartered at 200 WillowBrook Office Park in Fairport (Rochester), New York, with an office in East Syracuse, is a human resource management outsourcing and consulting firm serving clients throughout the United States. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.