Paid Family Leave is Coming to Maryland

 

Key Dates

The Act establishes a Family and Medical Leave Insurance Fund (the “Fund”), and instructs the Maryland Secretary of Labor to adopt regulations no later than June 1, 2023.  Beginning October 1, 2023, employees, employers, and self-employed individuals must begin making contributions to the Fund.[2]  Covered workers can begin receiving benefits on January 1, 2025.[3]

 

Substantive Highlights

Eligibility.  Employees who have worked at least 680 hours over the 12-month period immediately preceding the date on which the leave is to begin are “covered individuals” under the Act.  Self-employed individuals may also elect to participate in the program.

 

Employer Coverage. Covered employers include any person or governmental authority that employs at least one individual in the state of Maryland.

 

Amount of Leave.  An employee generally may not receive more than 12 weeks of benefits in an application year (i.e., the 12-month period beginning on the first day of the week in which an employee applies for benefits).  However, an employee may receive an additional 12 weeks of benefits if the individual qualifies for both parental leave (i.e., bonding with a new child as described below) and a medical leave due to their own serious health condition in the same application year.  Leave benefits will be available on a continuous or intermittent basis; however, an employee may not take intermittent leave in an increment of less than 4 hours.

 

Covered Absences/Family Members.  Maryland Family and Medical Leave benefits will be available for the following covered reasons: (1) to care for a child during the first year after the child’s birth or after the placement of the child through foster care, kinship care or adoption, (2) to care for a family member with a serious health condition,[4] (3) for the employee’s own serious health condition that results in their being unable to perform the functions of their position, (4) to care for a service member who is the employee’s next of kin, or (5) for a qualifying exigency arising out of the deployment of a service member who is a family member of the employee. 

 

Under the Act, “family member” includes: (1) the biological, adopted, foster or step-child of the employee, (2) a child for whom the employee has legal or physical custody or guardianship, (3) a child for whom the employee stands in loco parentis (regardless of the child’s age), (4) a biological, adoptive, foster or step-parent of the employee or the employee’s spouse, (5) the legal guardian of the employee or the ward of the employee or the employee’s spouse, (6) an individual who acted as a parent or stood in loco parentis to the employee or their spouse when they were a minor, (7) the employee’s spouse, (8) a biological, adoptive, foster or step-grandparent of the employee, (9) a biological, adoptive, foster or step-grandchild of the employee, and (10) a biological, adoptive, foster or step-sibling of the employee.

 

Funding.  Beginning October 1, 2023, (a) employers with 15 or more employees, (b) all employees, and (c) all self-employed individuals who elect to participate in the program, shall start making contributions to the Fund.  The Secretary of Labor shall set the respective rates of contribution by June 1, 2023.  Funding requirements will be subject to change based on bi-annual studies and recommendations by the Secretary of Labor.

 

Private Plans. A covered employer can also satisfy the Act’s requirements through a private employer-plan that meets or exceeds the benefits and coverages provided in the Act and is approved by the Maryland Department of Labor.  An employer that elects the private plan option (and its employees) will be exempt from the contribution requirements.

 

Amount of Wage Replacement.  The Act provides for partial wage replacement of up to 90% of the employee’s average weekly wages, with a maximum weekly benefit amount of $1,000.  Starting January 1, 2026, the maximum weekly benefit will be adjusted annually to reflect the annual percentage growth of the area’s Consumer Price Index.

 

Job Protection.  Leave for which benefits may be paid under the Act is job protected.  The Act requires employers to restore an employee to an equivalent position of employment upon the expiration of the leave.  This job protection extends to an employee who “receives benefits” or “takes leave from work for which benefits may be paid” under the Act.  The Act also provides that employers may only terminate an employee on such a leave “for cause” and deny the employee’s restoration rights if the denial is necessary to prevent “substantial and grievous” economic injury to the employer’s operations and the employer provides the employee notice of the intent to deny restoration rights at the time the employer determines the economic injury would occur.  Employers must also maintain an employee’s health benefits during any leave in the same manner required under the FMLA.

 

Employer Takeaways

With the paid leave landscape continuing to rapidly expand and grow in complexity, we encourage companies to reach out to their Seyfarth contact for solutions and recommendations for addressing compliance with paid leave requirements.  Stay tuned for another Seyfarth alert in the coming days, with a more detailed analysis of the Act that will focus on other topics, such as required employee notice, documentation, intermittent leave, waiting periods, coordination of benefits, employer notice and posting requirements, recordkeeping, and enforcement mechanisms and remedies.

 

To stay up-to-date on paid leave developments, click here to sign up for Seyfarth’s Paid Leave mailing list.  Companies interested in Seyfarth’s paid family leave laws survey should reach out to paidleave@seyfarth.com.

 

[1] California, Colorado, Connecticut, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Washington, Washington, D.C., and San Francisco (CA) have previously enacted mandatory paid family leave (“PFL”) laws.  Certain PFL laws, like the new Maryland mandate, are more appropriately called paid family and medical leave laws because they include benefits for absences related to an employee’s own medical condition, as well as “family” leave (e.g., bonding with a new child; care of a family member with a serious health condition; etc.).  There are currently four PFL laws — California, New Jersey, New York and Rhode Island — that do not offer leave benefits for an employee’s own medical condition.  However, each of these jurisdictions offers a separate state disability insurance benefit.  San Francisco’s program is tied to the California state PFL program and is limited to paid parental leave.

[2] Premium withholdings are scheduled to begin in both Colorado and Oregon on January 1, 2023.

[3] Benefits are expected to become available to covered workers in Oregon on September 3, 2023, and to covered workers in Colorado on January 1, 2024.

[4] Under the Act, “serious health condition” is defined as an illness, an injury, an impairment, or a physical or mental condition that involves: (I) inpatient care in a hospital, hospice, or residential health care facility; (II) continued treatment by a licensed health care provider; or (III) continued treatment or supervision at home by a licensed health care provider or other competent individual under the supervision of a licensed health care provider.