Effective June 1, 2022, Maryland Opts In To Paid Family And Medical Leave Program

On April 9, 2022, by gubernatorial veto override, the Maryland General Assembly passed the Time to Care Act of 2022 (“Act”). The Act establishes a Family and Medical Leave Insurance program (“Program”) in Maryland, effective June 1, 2022. All employers with at least 1 employee in Maryland will be subject to the Act, and the Program will provide paid, job-protected leave in the form of partial wage replacement to eligible individuals for certain qualifying reasons beginning on January 1, 2025. The Maryland Department of Labor (DOL) will be responsible for adjudicating eligibility for leave under the Program, and for processing/paying Family and Medical Leave Insurance (“FAMLI”) benefits.

An employer may qualify for an exception under the Act if the employer provides employees with benefits and/or insurance that meet or exceed the benefits and protections allotted by the Act. To apply for this exception, employers must submit a request to the Maryland DOL.

Funding.  All employers with 15 or more employees, all Maryland employees, and those self-employed persons(s) who choose to opt into the Program will be required to contribute to the Family and Medical Leave Insurance Fund (“Fund”) beginning on October 1, 2023. The Maryland Secretary of Labor (“Secretary”) will set the rates of contribution by June 1, 2023.  The Act does not specify how employers should count the 15-employee threshold (i.e., nationwide or those located in Maryland) for purposes of determining the applicability of the compulsory funding requirement. Clarification on this point is anticipated by June 1, 2023 with the release of the implementing regulations.

Eligibility.  Employees who have worked at least 680 hours over the 12-month period immediately preceding the date on which leave is to begin (the “Application Year”) are covered under the Act.  Beginning January 1, 2025, leave pertaining to these reasons is “qualifying” under the Act:

(1) care for a newborn child or a child newly placed for adoption, foster care, or kinship care with the employee during the first year after birth, adoption, or placement;

(2) care for a family member with a serious health condition;

(3) attend to a serious health condition that makes the employee unable to perform the employee’s job functions;

(4) care for a next-of-kin service member; or

(5) attend to a qualifying exigency arising out of a family member’s deployment. 

Terms such as “family member,” “serious health condition,” “qualifying exigency,” “deployment,” etc. are defined in the Act.  If the need to use leave is foreseeable, an employer may require an employee to provide written notice of the intention to take leave at least 30 days prior to the beginning of the period of leave.

Benefits.  

Leave Amount.  Generally, eligible employees may receive up to 12 weeks of paid leave in an Application Year. An employee may receive an additional 12 weeks of paid leave if the employee needs both parental leave (see item (1) above) and leave due to the employee’s own serious health condition (see item (3) above). Paid leave will be provided on a continuous or on an intermittent basis. Intermittent leave may not be used in increments of less than 4 hours.

Payment Amount.  Beginning on January 1, 2025, eligible employees will be provided partial wage replacement of up to 90% of their average weekly wages, with a maximum weekly benefit amount of $1,000 (the Act provides specific formulas to determine the precise weekly benefit amount). This maximum weekly benefit will be adjusted annually to reflect the annual growth of the Consumer Price Index for all urban consumers for the Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Area beginning on January 1, 2026. 

Interaction with Other Leave.  If leave under the Act is also eligible leave under the Family and Medical Leave Act (“FMLA”), leave under the Act shall run concurrently with FMLA leave.  Additionally, employees must exhaust all employer-provided leave, not otherwise required to be provided under law, prior to receiving benefits under the Act.

Job Restoration.  Leave under the Act is protected. Employers must restore an employee “to an equivalent position of employment” upon return from FAMLI leave. An employee may be denied job restoration only if denial is necessary to prevent “substantial and grievous economic injury” to the employer, which phrase is not defined by the Act.  We anticipate that the Secretary will further clarify this standard in the implementing regulations to be released no later than June 1, 2023. Additionally, an employer must continue to provide to an employee any employment health benefits in the same manner required under the FMLA for the time that the employee is on leave under the Act.  Furthermore, the Act makes it unlawful for an employer to take adverse action against employees for exercising their rights pursuant to the Act.

Posting and Employer Notice Requirements.  Covered employers are required to provide written notice to employees of employee rights and duties under the Act at the time of employment and annually thereafter. When an employee requests leave that may be covered under the Act, the employer must also provide a specific notice to the employee regarding rights and remedies under the Act.

Enforcement.  An employer who fails to make the compulsory contributions to the Fund may be required to pay both the amount due plus interest and a penalty of up to twice the amount of contribution. An employer who violates the Act may be ordered by the Secretary to pay lost wages and damages, reinstate the affected employee, and pay a civil penalty of up to $1,000 per employee.  

We encourage employers to begin preparing for this new Program. Be on the lookout for the implementing regulations to be published by the Secretary, no later than June 1, 2023.  We will post a client alert when these regulations are issued. We anticipate that the regulations will provide clarity regarding employee count for purposes of the employer compulsory contribution requirements, as well as definitions for the standard(s) pertaining to job restoration. 

Contact us if you have questions about how to prepare for and comply with this new law.