Quick Answer: Maryland employers must prepare for Family and Medical Leave Insurance (FAMLI) payroll deductions beginning January 1, 2027. Businesses should register, confirm contribution rates, update payroll systems, and notify employees before withholding starts. The State Plan rate is 0.9% of covered wages, with up to 0.45% deducted from employee paychecks. Employers considering private plans must submit a Declaration of Intent by November 15, 2026, to seek different contribution arrangements during 2027. The first quarterly report and payment are due April 30, 2027.
Do All Maryland Employers Need to Register for FAMLI Before January 2027?
Yes. Maryland employers with at least one employee working in a position covered by the state’s FAMLI program must register, even if they plan to use a private insurance plan. Registration is open, and businesses should complete it before payroll deductions begin in January 2027.
An authorized company officer must complete the initial registration using the business’s Employer Identification Number (EIN), company details, and identity verification. Payroll providers cannot register on an employer’s behalf, but they may help manage certain FAMLI tasks afterward. Employers should register early to allow time for payroll setup, employee notices, and HR compliance planning before the new year.
How Much Will Maryland Employers and Employees Pay for FAMLI in 2027?
Maryland’s FAMLI State Plan contribution rate is 0.9% of covered wages in 2027, up to the Social Security wage limit. Businesses with 15 or more total employees generally split the contribution equally with workers. Smaller employers receive a discount that removes their separate employer contribution, although the employee share still applies.
Employer Size | Employer Pays | Employee Pays (Maximum) |
Fewer than 15 employees | 0% | 0.45% |
15 or more employees | 0.45% | 0.45% |
Maryland counts employees working both inside and outside the state under the same EIN. For example, a company with 10 workers in Baltimore and eight in Pennsylvania generally falls into the 15-or-more category. During 2027, Maryland determines employer size each quarter using wage-and-hour reports.
For an employee earning $1,000 in covered wages during a pay period, the 0.45% deduction equals $4.50. Employers may also choose to pay some or all of the employee contribution instead of deducting the full amount from paychecks.
What Payroll Changes Should Maryland Employers Make Before January 1, 2027?
If an employer forgets to collect a FAMLI deduction during the regular pay period, Maryland generally does not allow that amount to be taken from a later paycheck. This may leave the employer responsible for covering the missed employee share. A limited exception allows collection over up to six pay periods when an employee’s paycheck is too small to cover the required contribution.
Before the first January payroll, employers should confirm their FAMLI registration, identify covered Maryland employees, check their total workforce size, and set the correct deduction rates. Businesses should also test payroll calculations and confirm that employee notices will be delivered on time. Reviewing benefits administration technology can help employers keep payroll information and employee records organized as the new requirements begin.
When Must Maryland Employers Notify Employees About FAMLI Deductions?
Employees should know about the new deduction before it appears on their paychecks. Maryland requires employers collecting FAMLI contributions to notify workers at least one pay period before deductions begin. The notice should explain the deduction and how much employees may be required to contribute.
For example, a Maryland business paying employees every two weeks should review its December 2026 payroll calendar to determine when notices must be sent. Employers should keep a record of when the information was provided. Separate FAMLI notice requirements begin in July 2027, including notices for new hires, annual communications, and qualifying leave situations. Reviewing existing employee leave policies can help businesses prepare for those later requirements.
Can Maryland Employers Choose a Private FAMLI Plan Instead?
Yes. Maryland employers may use an approved commercial insurance plan or qualifying self-insured plan that provides benefits equal to or better than the State Plan. Commercial plans are available to employers of any size, while self-insured plans are generally limited to businesses with 50 or more employees. Smaller employers may qualify for an exception if they already had a FAMLI-compliant plan in place by July 31, 2026.
Employers considering private coverage should pay close attention to the November 15, 2026 Declaration of Intent deadline. Businesses seeking an exemption from remitting State Plan contributions during 2027 must submit the declaration through their FAMLI account, along with a completed Proof of Private Plan Consultation signed by a licensed insurance agent or qualifying insurance company representative. Because November 15 falls on a Sunday, employers should submit their documents early rather than assume an extension to Monday.
Submitting the declaration does not automatically approve the private plan. Formal applications open in summer 2027 and must be submitted by October 1, 2027. Employers with accepted declarations generally must collect or fund the required 2027 contributions and hold them in a separate escrow account instead of sending them to the State Plan. Quarterly wage-and-hour reporting still applies, and the final use of escrowed funds depends on whether the private plan is approved.
What Should Maryland Employers Prepare for the First FAMLI Reporting Deadline?
Maryland employers must submit their first quarterly wage-and-hour report by April 30, 2027, covering wages paid from January 1 through March 31. State Plan employers must also pay their required contributions by that date. Reports are submitted electronically through Maryland’s FAMLI system, which is separate from the state’s unemployment insurance reporting system.
Employers should track employee wages, hours, contribution amounts, and workforce size throughout the first quarter. This is especially important for businesses near the 15-employee threshold because their employer contribution requirements may change based on quarterly employee counts.
Seasonal hiring also matters across Maryland. Retailers in Baltimore and Annapolis may add temporary workers for Thanksgiving and Christmas, while hospitality businesses in Ocean City may reduce staffing after the summer tourism season. These changes can affect employee counts and payroll records heading into 2027. Including FAMLI preparation in regular quarterly compliance checks can help employers stay organized as reporting begins.
Frequently Asked Questions About Maryland FAMLI Payroll Deductions
When do Maryland FAMLI payroll deductions begin?
Maryland FAMLI payroll deductions begin January 1, 2027, for covered wages paid from that date. Employers participating in the State Plan must submit their first quarterly contribution payment and wage-and-hour report by April 30, 2027.
How much can Maryland employers deduct from employee paychecks?
Maryland employers may deduct up to 0.45% of covered employee wages under the 2027 FAMLI State Plan, subject to the Social Security wage limit. The total contribution rate is 0.9%, but employers may choose to pay some or all of the employee’s share.
Do Maryland businesses with fewer than 15 employees have to participate in FAMLI?
Yes. Maryland businesses with at least one employee working in a position covered by the state’s FAMLI program generally must register. Employers with fewer than 15 total employees do not owe a separate employer contribution under the State Plan, but employee contributions still apply.
Can Maryland employees opt out of FAMLI payroll deductions?
No. Employees covered by Maryland FAMLI generally cannot opt out because they do not expect to use paid leave. However, employers may choose to pay the employee contribution themselves instead of deducting the permitted amount from paychecks.
When can Maryland employees start using FAMLI paid leave benefits?
Maryland FAMLI paid leave benefits are scheduled to begin January 1, 2028. Eligible employees may receive up to 12 weeks of paid, job-protected leave for qualifying family or medical reasons, depending on the program’s eligibility requirements.
Prepare Your Maryland Business for FAMLI With JS Benefits Group
Maryland employers should review FAMLI registration, payroll deductions, employee notices, and reporting requirements before January 2027. JS Benefits Group helps businesses evaluate HR compliance responsibilities, employee benefits, and benefits administration needs. Call 877-355-6070 or contact JS Benefits Group to schedule an HR compliance and benefits consultation.
