Maryland’s Paid Family and Medical Leave
June 03, 2022
Employee benefits are an important part of hiring and retention of employees. There is a wide range of employee benefits offered from one business to another. Maryland has become the latest State to establish paid family and medical leave for employees with the enactment of the Time to Care Act of 2022 (the “Act”). The Act creates a family and medical leave insurance program (the “Program”) which provides paid leave benefits to covered employees and participating self-employed individuals.
Like the federal Family and Medical Leave Act (“FMLA”), it provides up to 12 weeks of leave for certain conditions ranging from birth or adoption of a child, an employee’s serious health condition, care for a family member with a serious health condition, and more. While the FMLA is unpaid time off, the Act is paid time off. The interplay between the federal FMLA, the Act, and paid sick leave under the Maryland Healthy Working Families Act is still to be determined.
The Program establishes a family and medical leave insurance fund (the “Fund”). The Fund will be financed by contributions from (i) employees, (ii) employers with 15 or more employees, and (iii) participating self-employed individuals. Every employer with 15 or more employees that employs at least one individual in Maryland, every employee (through payroll deductions), and every participating self-employed individual will be required to contribute to the Fund. The split between employees and employers will be determined by regulations that have yet to be adopted, however the Act states that the employer split shall be between 25 to 75 percent.
An employer may satisfy the Act’s requirements by providing all eligible employees with a private employer plan with benefits and/or insurance that meets or exceeds the rights, protections and benefits provided by the Act. An employer must file their private employer plan with the State in order to receive the exemption.
Employees may take paid leave on an intermittent basis in increments of at least 4 hours, if they make a reasonable effort to schedule the intermittent leave in a manner that does not unduly disrupt the employer’s operations; and provide the employer with reasonable and practicable prior notice of the reason for intermittent leave. If the need to use leave is foreseeable, an employer may require employees to provide a 30 days’ written notice of an employee’s intention to take leave under the Act.
An employer may terminate the employment of an employee on family and medical leave only for “cause” (which the Act does not define). Further, an employer can deny restoration of an employee’s position after they take covered leave if: (i) the denial is necessary to prevent substantial and grievous economic injury to the operations of the employer; (ii) the employer notifies the employee of its intent to deny restoration of the position at the time the employer determines the economic injury would occur; and (iii) if the leave has already begun, the employee elects not to return to employment after receiving notice of the employer’s intention to deny restoration.
By June 1, 2023, Maryland’s Secretary of Labor must adopt regulations and set payroll tax rates for certain employees and employers to fund the Program, meaning that the draft regulations should be out for review this Fall 2022. Employees will be subject to the tax beginning on October 1, 2023. Paid leave will be available starting January 1, 2025, with paid leave benefits made directly by the State to eligible individuals from the Fund. However, the funding will begin on October 1, 2023 in order to build up the Fund.
In conclusion, businesses should start to plan for implementation of the paid family and medical leave benefits. Businesses should also consider their options to change their overall employee benefits plan, the increased costs to the business, and the availability of personnel who will temporarily fill the roles of those employees on family and medical leave. Eventually, policies and employee handbooks will need to be revised.
1 Vasilios Peros is founder and principal of Law Office of Vasilios Peros, P.C. His practice is focused primarily on business, technology and intellectual property law. He has been recognized as one of Greater Baltimore’s top attorneys, including SmartCEO’s 2016 Centers of Influence, 2015 CPA + ESQs, 2014 Power Players, and Legal Elite in 2011, 2010 and 2009. He can be reached at (410) 274-2053 and VPeros@PerosLaw.com.
2 This article is provided for informational purposes only and should not be construed as a legal opinion or legal advice. The reader should not rely on this article in making business, legal or other decisions on any matter without first consulting an attorney regarding any such decision or undertaking.