As Md. plans new medical leave program, business groups express concerns

As Maryland regulators continue to develop the state’s new Family and Medical Leave Insurance program, business groups are expressing concerns about the condensed timeline of the rule-making process.

The new FAMLI Division in the Maryland Department of Labor will create and oversee the program, which was authorized in 2022 under the Time to Care Act and seeks to ensure Marylanders have access to paid leave while being away from work to care for themselves or a family member. The FAMLI division is developing rules and regulations as a phase of the program’s implementation.

The program is expected to cover over 2.5 million individuals and over 200,000 claims annually.

The Time to Care Act became law in April 2022 after lawmakers overrode Gov. Larry Hogan’s veto. The program will provide up to 12 weeks of benefits for individuals on leave, with required contributions from employers and employees to fund the benefits program.

Contributions were set to begin in October 2023 and benefit payments would start in January 2025, but a bill this spring delayed the implementation of both by one year.

A majority of work in 2023 will be drafting and developing regulations for the program. The Department of Labor is conducting six phases for different policy areas, consisting of public meetings and drafted regulations for community members to provide comments.

Mike O’Halloran, the Maryland state director of the National Federation of Independent Business, expressed concern regarding the condensed timeline that will finalize regulations by January, as well as what he viewed as a lack of significant outreach to small business owners.

Andrew Griffin, senior vice president of government affairs for the Maryland Chamber of Commerce, echoed O’Halloran’s concerns about the truncated timeline. The labor department has to create significant regulations in a tight time frame due to the timeline from the General Assembly, which is likely to lead to flaws in the rules, he said.

The Maryland Department of Labor did not respond to a request for comment prior to publication.

Employees who have worked at least 680 hours over the last 12 months are eligible to receive up to 12 weeks of benefits for the care of a newborn child, care for a family member with a serious health condition, or to attend to a serious health condition. The weekly benefit amount depends on the employee’s weekly wage. 

Employers with 15 or more employees must contribute to the fund, although employers may satisfy the requirements through private employer insurance coverage if it meets or exceeds the benefits laid out in the state plan. The contribution rate for the state program will be split evenly between employers and employees, and the total contribution rate cannot exceed 1.2% of the employee’s wages.

Griffin said there is a substantial need for clarification on the terms used to define the program. The most recent language proposed for the employer exemption left him concerned, specifically regarding employers that already offer benefits and hope to make minor tweaks to their coverage rather than having an additional financial burden under the new FAMLI contribution requirements.

The Chamber of Commerce also would like to see the program mirror federal medical leave as closely as possible, since employers are already familiar with that process, Griffin said.

With contribution set to begin next year, the state should launch a public education campaign to make both employees and employers aware of the new program, the two business group officials said. Otherwise, paycheck deductions are likely to be an unwelcome surprise to employees, Griffin said.

O’Halloran said a longer rulemaking timeline would allow for increased public outreach and input, enabling a more robust conversation about how the program can fit the needs of employers and employees.