Maryland Department of Labor announces contribution rate for the forthcoming Family and Medical Leave Insurance system
Due to recent legislative changes, the contribution period will now begin July 1, 2025. This means payroll deductions will begin on July 1, 2025, and employers will remit the first payment to the State in October 2025. Benefits will now begin July 1, 2026. The contribution rate announced below remains unchanged.
Announcement highlights progress made in delivering paid leave to Maryland workers
Baltimore, MD (September 29, 2023) – The Maryland Department of Labor announced today the initial contribution rate for the new Family and Medical Leave Insurance State Plan. The rate will be 0.90% of covered wages, and will be equally divided between employees and employers with 15 or more workers.
The contribution rate announced today is the rate applicable to employers and self-employed individuals choosing coverage under the State Plan. Employers will need to make a plan selection for Family and Medical Leave Insurance coverage. Employers may choose coverage under the State Plan, under an approved commercially insured plan sold by insurers in the state, or under an approved self-insured plan.
“Family and Medical Leave Insurance will benefit Maryland workers and employers by allowing workers income and job protection during life’s most vulnerable moments,” said Maryland Department of Labor Secretary Portia Wu. “Employers will keep greater workforce attachment and increased labor force participation, especially among women who are often the key caregivers in their families. This is beneficial for Maryland’s economy and the announcement of the contribution rate shows the tremendous progress of the Moore-Miller Administration’s goals to support small businesses, local employers, and working families.”
Employers participating in the State Plan will begin making contributions on wages paid to employees starting October 1, 2024. The total rate of 0.9% of covered wages up to the Social Security wage base (currently $160,200) will be evenly split between employees and employers, who will each contribute 0.45%. Small businesses with 14 or fewer employees are exempt from the employer’s portion of the contributions. Employees of those small businesses will continue to contribute their 0.45% share.
Starting in 2026, Maryland workers will receive job protection and up to $1000 a week for up to 12 weeks to take time away from work to care for themselves or a loved one, to bond with a child, and for certain military-related events. The contribution rate announced today will continue through at least June 30, 2026.
The Department’s rate decision was informed by a comprehensive cost analysis of the Family and Medical Leave Insurance system prepared by the Jacob France Institute at the Merrick School of Business at the University of Baltimore and an actuarial report from Milliman, Inc.
“By setting the combined contribution rate at less than one percent of wages, and less than half a percent for workers and employers each, the Department is doing its part to make sure paid leave is affordable and sustainable for Maryland workers and employers in the long term,” said Assistant Secretary of Labor for Family and Medical Leave Insurance Elliot Schreur.
When benefits start in January 2026, either the employer’s private plan or the State Plan will provide partial wage replacement to the worker while they are on leave.
The Department of Labor strives to create an equitable and inclusive Maryland where all residents have the opportunities and resources to attain financial stability, reach their career potential, and contribute to their communities; where businesses have access to capital and the skilled workforce they need to succeed; where workplaces are safe and well-regulated; and where the economy is resilient and growing. For updates and information, follow Labor on LinkedIn, Twitter, Facebook, and visit our website.
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Jamie Mangrum