Hunton Employment & Labor Perspectives

On April 9, 2022, Maryland became just the tenth state (in addition to the District of Columbia) to enact a paid family and medical leave law that covers private-sector workers, after overriding Governor Larry Hogan’s (R) veto.

Neighboring Delaware may soon follow—a similar bill passed the Delaware Senate in March and is pending a vote in the House.

The Maryland law creates a new Title 8.3 to the Annotated Code of Maryland and establishes the state’s “Family and Medical Leave Insurance Program.”  The law covers the vast majority of employers in the state, defined as “a person or governmental entity that employs at least one individual in the state,” and will ensure that covered private sector employees—those employees who have worked at least 680 hours over the 12-month period immediately preceding the date on which the leave is to begin—have up to 12 weeks annually of paid time off for certain purposes.  Benefits will replace 90% of weekly wages for an employer’s lowest-income employees (with a smaller percentage for higher-paid workers), up to a maximum of $1,000 per week.

Eligible employees may take paid leave for the following reasons:

• to care for a child during the first year after the child’s birth or after the placement of the child through foster care, kinship care, or adoption;
• to care for a family member with a serious health condition. “Family member” includes:  (i) a biological, adopted, foster, or stepchild of the covered employee, or child for whom the covered employee has legal or physical custody or guardianship, or for whom the covered employee stands in loco parentis; (ii) a biological, adoptive, foster, or stepparent of the covered employee or the covered employee’s spouse; (iii) a legal guardian of the covered employee or ward of the covered employee or of the covered employee’s spouse; (iv) an individual who acted as a parent or stood in loco parentis to the covered employee or the covered employee’s spouse when they were a  minor; (v) the spouse of the covered employee; or (vi) a biological, adopted, foster, or step-grandparent, grandchild, or sibling of the covered employee;
• to provide leave because covered employees have a serious health condition that results in covered employees being unable to perform the functions of their position;
• to care for a service member who is the covered employee’s next of kin; or,
• to provide leave because covered employees have a qualifying exigency arising out of the deployment of a service member who is a family member of the covered employees.

A parent could possibly get up to 24 weeks of paid leave if the covered employee needs medical leave during pregnancy and also parental leave after childbirth.

Benefits under the law will not commence until January 1, 2025.  The law will be funded through a payroll tax that is scheduled to begin on October 1, 2023, and which will be split between employers (with 15 or more employees) and employees.  The law directed the state Department of Labor to conduct a study to determine what the tax rate will be.

The measure had broad support among the legislature’s Democratic majority, but Republicans mostly opposed the plan, labelling it a poorly timed financial burden on businesses and employees that are recovering from the pandemic and struggling with high inflation.

While Maryland employers do not need to take immediate steps to respond to this new law, they should be aware that this change is on the horizon and prepare accordingly.