Statutory Update: Maryland Enacts Paid Family and Medical Leave; WA PFML and OR PST Amendments

Maryland Paid Family and Medical Leave (MD PFML)

Effective Date

Contributions: October 1, 2023

Benefits Entitlement: January 1, 2025

Applies To

All Employers who employ at least one individual in the State of Maryland, including governmental entities

Excludes “self-employed individuals”: any individual who is the sole owner and only employee of a sole proprietorship, limited liability company, C Corporation, or S Corporation. Self-employed individuals may opt in, for an initial period of no fewer than 3 years.

All Employees

Types of Plans

State Program

Private Plan - An employer may satisfy MD PFML requirements through a private employer plan consisting of employer-provided benefits, insurance or a combination of both if the private employer plan is offered to all of the employer’s eligible employees and meets or exceeds the rights, protection and benefits provided to a covered employee under the MD PFML law.

Contributions

Employer- and Employee-Paid

Beginning October 1, 2023, employees*, employers with 15 or more employees**, and self-employed individuals electing to participate in the program will be required to contribute to the Family and Medical Leave Insurance Fund.

The initial rate will be determined on or before June 1, 2023, and will be in effect from October 1, 2023, through December 31, 2025.

Beginning in 2025 the contribution rate and the employer/employee cost share will be determined every two years.  To be set on or by June 1 and be in effect for the 24-month period beginning the next January 1.

Maximum wages subject to premium assessment will be equal to maximum wages subject to social security taxation ($147,000 in 2022).

If the employer elects to pay a portion of the employee’s required contribution, the employer may deduct an amount that is less than 75% of the rate of contribution required from the wages of the employee.

Private plan sponsors and their covered employees are exempt from contributing to the Family and Medical Leave Insurance Fund.

*  Section 8 of the law text states that it is intended that the State pay the required contribution to the Fund for employees who make an hourly wage that is less than $15.00 per hour.  This provision expires June 30, 2026.

** Section 7 of the law’s text states that it is intended that the State pay the required contribution to the Fund for employers that are community providers that are community–based agencies or programs funded by the Behavioral Health Administration, the Developmental Disabilities Administration, or the Medical Care Programs Administration to serve individuals with mental disorders, substance–related disorders, or a combination of those disorders or developmental disabilities.

Reasons for Leave

Employee’s own serious health condition;

To bond with a child during the first year following birth or after placement for foster care, kinship care or adoption;

To care for a family member with serious health condition;

To care for a service member with a serious health condition resulting from military service who is the employee’s next of kin;

For circumstances and needs related to a family member’s qualifying exigency.

Covered Family Members

Employee’s spouse;

Child of any age: the employee’s biological, adopted, foster, or stepchild; a child for whom the employee has legal or physical custody or guardianship; legal ward of the employee or of the employee’s spouse; a child to whom the employee stands in loco parentis, regardless of the child’s age;

Parent: employee’s or spouse’s biological, adoptive, foster, stepparent; someone who acted as a parent or stood in loco parentis to the employee or the employee’s spouse as a minor; employee’s legal guardian;

Employee’s grandparent, grandchild or sibling, whether biological, adoptive, foster or step.

Eligibility for Leave

No service length requirement.

Employee must have worked at least 680 hours over the 12-month period immediately preceding the date on which leave is to begin.

Note:  Regulations may clarify whether this refers to hours worked with the current employer or with any employer in Maryland.

Leave Entitlement

An employee may not receive more than 12 weeks of benefits per Application Year, except that an employee may receive an additional 12 weeks if, during the same Application Year, the employee takes leave for their own serious health condition and leave to bond with a new child.

“Application Year”: the 12-month period beginning on the first day of the calendar week in which an individual files an application for MD PFML benefits

Leave may be taken intermittently in increments of at least four hours.

Weekly Benefit Amount

Benefit Calculation:

If the employee’s Average Weekly Wage* (AWW) is 65% or less of the State Average Weekly Wage** (SAWW), the employee’s Weekly Benefit Amount (WBA) will be 90% of the employee’s AWW.

If the employee’s AWW is greater than 65% of the SAWW, the employee’s WBA will be the sum of:

   1. 90% of employee’s Average Weekly Wage  (AWW) up to 65% of the SAWW, plus

   2. 50% of the employee’s AWW that is greater than 65% of the SAWW.

If the employee is taking partially paid leave, the employee’s WBA will be the lesser of:

   1. The amount required to make up the difference between wages paid to the employee while the employee is taking partially paid leave and the full wages normally paid to the employee, or

   2. If the employee’s AWW is greater than 65% of the SAWW, the employee’s WBA will be the sum of: (a.) 90% of employee’s Average Weekly Wage (AWW) up to 65% of the SAWW, plus (b.) 50% of the employee’s AWW that is greater than 65% of the SAWW

*  Average Weekly Wage (AWW): the employee’s total wages received over the last 680 hours for which the employee was paid divided by the number of weeks worked.

** State Average Weekly Wage (SAWW): the wage calculated on or before December 15 each year for the following July 1, per MD Code §9-603 (Workers Compensation) ($1,338 for fiscal year ending June 30, 2021, for WC benefits beginning on or after January 1, 2022)

Minimum Weekly Benefit:  $50

Maximum Weekly Benefit:  $1,000 in 2025

The Maximum Weekly Benefit will be announced each September 1 (beginning September 1, 2025) and will apply to claims for benefits filed on or after the following January 1.

Notice to Employer

For leave that is foreseeable, employers may require employees to provide at least 30 days’ notice.

If the need for leave is not foreseeable the employee must (1) provide as soon as practicable, and (2) generally comply with the employer’s procedural requirements for requesting or reporting other leave, if those requirements do not interfere with the employee’s ability to use MD PFML leave.

Employment and Benefits Protection

Employees returning from MD PFML must be restored to a position of employment equivalent to the position held prior to leave.  An employer may deny restoration of the employee’s position of employment if:

1. the denial is necessary to prevent substantial and grievous economic injury to the employer’s operations;

2. the employer notifies the employee of the intent to deny restoration of the employee’s position at the time the employer determines the economic injury would occur; and

3. if the employee’s MD PFML leave has already begun, the employee elects not to return to employment after receiving notice of the employer’s intention to deny restoration of the employee’s position.

During an employee’s period of MD PFML, an employer may terminate his or her employment only for cause.

During an employee’s period of MD PFML, employment health benefits must continue in the same manner as required under FMLA.

Coordination with Other Leaves

If an employee takes leave for which they are receiving MD PFML benefits, the leave will run concurrently with eligible leave that may be taken by the employee under FMLA.

Employees must exhaust all employer-provided leave that is not required to be provided under law before receiving MD PFML benefits. Employer-provided leave to be exhausted must comply with job, benefits, retaliation and discrimination protections required during MD PFML leave.

Employees receiving benefits under Unemployment* or wage replacement benefits under Workers' Compensation are not eligible for MD PFML benefits, except that an employee receiving compensation for a permanent partial disability under Workers’ Compensation may be eligible.

*  Section 4 of the law’s text states that “on or before January 1, 2023, the Maryland Department of Labor shall report … on whether a covered employee using benefits under the Maryland Family and Medical Leave Insurance Program … is also eligible for Unemployment Insurance Benefits … and the effect that dual eligibility has on employer ratings.”

Collective Bargaining Agreements (CBA)

The law does not diminish an employer’s obligation to comply with a CBA or employer policy that allows an employee to take leave for a longer period of time than the employee would be able to receive MD PFML benefits.

An employee’s right to benefits under the MD PFML law may not be diminished by CBA or employer policy.

An agreement to waive an employee’s rights under the MD PFML law is void as against public policy.

Notice Requirements

Employers must provide written notice of rights and responsibilities under the MD PFML law to each employee:

• at the time of hire

• annually; and

• within 5 business days of the employer being notified by the employee or otherwise becoming aware that the employee’s need for leave may be for a MD PFML-qualifying reason

Model notice(s) will be provided by the Maryland Department of Labor.