© 2022 American Payroll Institute, Inc. Maryland Creates Paid Family and Medical Leave Insurance Program Effective October 1, 2023, Maryland employers will be required to withhold employee contributions for a newly established paid family and medical leave (PFML) insurance program. Maryland employers with 15 or more employees will be required to contribute to the program. Maryland employers with fewer than 15 employees will not be required to pay employer contributions, but will still be required to withhold employee contributions. Maryland is the tenth state (plus the District of Columbia) to establish a PFML program. States with PFML programs are: California, Colorado (effective January 1, 2023), Connecticut, the District of Columbia, Maryland (effective October 1, 2023), Massachusetts, New Jersey, New York, Oregon (effective January 1, 2023), Rhode Island, and Washington [S.B. 275, L. 2022]. Coverage The new law broadly defines an employer as a person or governmental entity that employs at least one individual in Maryland. Covered employees are those employees who have worked at least 680 hours during the 12-month period immediately preceding the date on which leave begins. Exemptions. A self-employed individual who is the sole owner and only employee of a sole proprietorship, limited liability company, C corporation, or S corporation is exempt but can choose to opt in to the program. Contributions The contribution rates for employers and employees have not yet been determined, but they will be set by the Maryland Secretary of Labor every two years. The taxable wage base is equal to the federal social security wage base. On or before June 1, 2023, the Secretary of Labor will determine employer and employee contribution rates, including the breakdown of each category as a percentage of total contributions. Effective October 1, 2023, employers of covered employees will be required to withhold and remit employee contributions. Employers with 15 employees or more will also be required to pay employer contributions. The rates set on or before June 1, 2023, will apply from October 1, 2023, through December 31, 2025, inclusive. Beginning on June 1, 2025, and going forward, every two years the Secretary of Labor will announce new rates by June 1, to go into effect on January 1 of the following year and to apply for two years. Employer notice Covered employers will be required to provide written notice of the program to each employee at the time of hire and annually thereafter. Additionally, when an employee requests PFML or when the employer knows an employee’s leave may be for a qualifying reason, the employer must notify the employee of eligibility to take PFML leave within five business days. A newly created Family and Medical Leave Insurance Program division within the Maryland Department of Labor will develop standard notices for employers to use. Relationship to other leave Eligible employees will be required to exhaust all employer-provided leave that is not required to be provided under law before receiving benefits from the PFML program. PFML will run concurrently with eligible leave that may be taken under the federal Family and Medical Leave Act (FMLA). Benefits Beginning January 1, 2025, eligible employees can qualify to take up to 12 weeks of PFML annually. Beginning January 1, 2025, covered employees can begin applying for up to 12 weeks of PFML annually: for the employee’s own serious health condition to bond with a newborn or newly placed child via adoption, foster care, or kinship care to care for a family member with a serious health condition to care for a servicemember with a serious health condition resulting from military service or to attend to a qualifying exigency arising out of a family member’s deployment. New parents with a separate illness or crisis might qualify for an additional 12 weeks of PFML annually. Intermittent leave Eligible employees will be allowed to take leave on an intermittent leave schedule, so long as the employee makes a reasonable effort to: (1) schedule the intermittent leave in a manner that does not unduly disrupt the operations of the employer and (2) provide the employer with reasonable and practicable prior notice of the reason for which the intermittent leave is necessary. Intermittent leave may not be taken in an increment of less than four hours. Employee notice Employers may require covered employees to provide written notice at least 30 days before commencing leave if the need to use leave is foreseeable. If the need for leave is not foreseeable, the employee must: provide notice to the employer as soon as practicable and generally comply with the employer’s notice or procedural requirements for requesting or reporting other leave if those requirements do not interfere with the employee’s ability to use leave for qualified reasons. April 18, 2022 Volume 24 Issue 8
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