Employment Law Update: Details of Maryland’s New Paid Family Leave Program Will Come Into Focus in 2024
Date: January 3, 2024
By:
David M. Stevens
In 2022, Maryland joined a list of more than ten states that have enacted legislation establishing a statewide paid leave program. In 2023, the General Assembly passed a statute that delayed several steps in the implementation of that program. In 2024, however, the details of the new program will be unveiled, and by the end of the year, employers will be responsible for making and collecting payroll contributions to fund the new initiative.
To briefly summarize, the paid family leave program will provide temporary benefits to employees who take leave from work for one of several qualifying reasons, including to care for a family member with a serious health condition, to bond with a new child, to care for a servicemember, or for the employee’s own health condition. Employees can receive up to twelve weeks of benefits through the program on an annual basis (or up to twenty-four weeks in the event an employee welcomes a new child and during the same year also experiences a serious health condition that renders the employee unable to work). The program will provide benefits in varying dollar amounts that are to be calculated based upon the employee’s regular wages, subject to an overall cap on the weekly benefit amount. The program will be funded by a mix of contributions from employers and employees.
Under the revised timetable set by the General Assembly, regulations setting forth the details of the program are due to be released this month. Beginning on October 1, 2024, employers with fifteen or more employees will begin making tax contributions to the program. Employers will likewise be obligated to withhold new tax amounts from their employees’ paychecks. The Maryland Department of Labor has announced that the initial contribution rate for the program will be 0.90% of payrolls up to the Social Security taxable wage base, with that contribution amount to be divided evenly between employers and employees. Although tax contributions will begin in October 2024, benefits under the program will not become available to employees until January 1, 2026.
While the extended timetable for implementation of the program has kept the issue on the back-burner for many employers, that will change once the regulations governing the program are issued and employers must begin taking steps to ensure collection of the required tax contributions. Employers should consider speaking with legal counsel to properly prepare for implementation of the new program.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.