by Shelby Felton, Esq. - Director and Product Compliance Counsel
April 26, 2024
On April 25, 2024, Maryland Governor Wes Moore signed Senate Bill 485 and House Bill 571, the Family and Medical Leave Insurance Program modification bills, into law. What do those bills do? DELAY, DELAY, DELAY the PFML program!
Remember when Maryland passed its PFML program in April 2022 by a veto override? That's okay, no one else remembers either. At that time, contributions were supposed to start on October 1, 2023, and benefits on January 1, 2025. Remember May 3, 2023, when SB 828 delayed the program by 1 year? At that time, contributions were extended to October 1, 2024, and benefits to January 1, 2026.
So, like Doc and his DeLorean, how far into the future is SB 485 and HB 571 sending us?
Contributions will now begin on July 1, 2025, and benefits will start July 1, 2026. The contribution rate announcement is being moved to February 1, 2025, and will be in effect from July 1, 2025, to June 30, 2026.
The bills also make several changes to the PFML law as follows:
- The definition of "covered employee" is revised to include anyone who has worked 680 hours in the state over the 4 most recently completed calendar quarters before leave. Prior to the revision it was based on the 12-month period before leave begins.
- The definition of "wages" is updated to remove the specifics of what is considered "wages" and replace them with a reference to § 8–101, which is the unemployment section of the Labor and Employment statute. As defined in § 8–101 "wages" includes: bonuses, commissions, tips, and the cash value of all compensation in any medium other than cash. According to the MD Department of Labor, aligning the definitions eliminates the need to calculate two different sets of wages for the two programs.
- The average weekly wage calculation will now be based on the highest of the previous 4 completed calendar quarters divided by 13. Previously, it was to be based on the last 680 hours prior to leave.
- The benefit maximum now may not exceed $1000 for the 6-month period beginning July 1, 2026. Previously, that threshold applied to the 12-month period beginning January 1, 2026.
- For private plans, employers now (1) may only deduct up to 50% of the contribution rate from employees, (2) may be charged administration fees, and (3) are subject to several criteria to determine whether they're eligible to even have a private plan including:
- number of employees,
- capitalization,
- bondedness, and
- status as a government employer.
- Requires the employer or insurer to bear the costs of an appeal if an employee prevails in an appeal of an adverse decision.
Additional changes to the PFML program include:
- information disclosure,
- grammatical changes,
- department annual report date, and
- definition of "the fund."
In response to these statutory changes, the Department of Labor stated it will update its draft regulations in the coming weeks and hold a public engagement session before it initiates the formal regulatory review process.
Like Marty McFly, we'll be back in the future with more information about MD PFML and its regulations.
Reliance Matrix Can Help!
Better than a DeLorean, if you need help navigating what's coming up on the PFML road, Reliance Matrix offers employers leave administration, including state paid family and medical leave solutions and accommodation services. For more information, contact your Reliance Matrix account manager or send us a message to [email protected].
Through its insurance and administrative services entities, Reliance Matrix offers integrated leave management services involving the FMLA, state-mandated paid family and medical leave and accommodation solutions. Product features and availability may vary by state. For more information, please contact your Reliance Matrix account manager, or reach us at [email protected].