Maryland Employers – Here’s the Contribution Rate for Paid Family and Medical Leave
As employers with Maryland employees seek to assess the economic impact of the forthcoming paid family and medical leave mandate, one question has been – what is the contribution rate? And the Maryland Department of Labor has now announced that it will be .90% of an employee’s covered wages, equally divided between employees and employers with 15+ employees.
As most Maryland employers know, the State will be implementing a paid family and medical leave benefits program (known as FAMLI), will provide most Maryland employees with 12 weeks of paid family and medical leave, with the possibility of an additional 12 weeks of paid parental leave. Contributions will begin in October 2024 and benefits will begin on January 1, 2026. And while employers with fewer than 15 employees need not make their portion of the contributions, their employees will be required to do so and will be entitled to FAMLI benefits. As noted above, the contribution is based on covered wages, not total wages. Under the law, covered wages means up to and including the social security wage base, which limits the amount of earnings subject to taxation for a given year; for 2024, this wage base is $168,600.
The MDOL is currently working on regulations to interpret and implement the Act by January 1, 2024, and we have summarized those efforts thus far in our August and September 2023 E-Updates. But at this time, employers now have sufficient information to calculate the economic impact of the contribution – with their share being .45% of each employee’s wages up to $168,600, at least until it goes up to $174,900 in 2025.