On April 9, 2022, the Maryland legislature voted to override Governor Hogan's veto and passed a paid family and medical leave insurance program (Time to Care Act). Maryland is the tenth state to enact paid family and medical leave, and other states, including Delaware, are considering similar measures, indicating that this could be a national trend. The Act goes into effect on June 1, 2022, though major substantive provisions do not begin until October 23, 2023 (payroll tax) and January 1, 2025 (benefits).
Like many similar acts across the country, the Time to Care Act establishes a state-administered fund (the Family and Medical Leave Insurance Fund) to which employees, employers, and self-employed individuals will make contributions. Starting on October 23, 2023, employers with more than 15 workers and all employees will begin paying into the Fund. Notably, the rate at which employers and employees will contribute has not been determined yet, and the Act delegates this responsibility to the Maryland Department of Labor. On January 1, 2025, benefits will be available under the Act, and covered employees will be able to apply to take paid leave.
The scope of the Act is quite broad and covers most employees, including those in the private and public sectors and those who work either part-time or full-time. Under the Act, covered employees are those who have worked at least 680 hours in the 12-month period preceding the start of leave, a number of hours below that required for eligibility under the federal Family and Medical Leave Act (FMLA). Covered employees are eligible for up to 12 weeks of paid time off annually for certain qualifying circumstances, which generally correspond to those under the FMLA (the birth of a new child, an employee's personal medical problems, a family member's serious illness, or military deployment of a family member). In some scenarios, an employee may receive an additional 12 weeks of paid leave if they have a serious health issue in the same year as their child's birth. Leave under the Act is not in addition to leave under the FMLA, and employees must exhaust certain other employer-provided leaves before they may receive benefits under the Act.
The Act provides that covered employees can receive wage replacement income of up to 90% of their weekly wages from the Fund (with a maximum of $1,000 per week, indexed to inflation). The Fund works on a sliding scale, with lower-income workers receiving a greater percentage of their income than higher-paid workers.
The Act also includes provisions on retaliation and termination and protects an employee's right to return to work after a leave of absence. These provisions will go into effect on January 1, 2025 alongside the paid leave benefits.
A number of things could change between now and full implementation of the law: the Department of Labor is directed to issue regulations by June 1, 2023, and there may be legal challenges to the law, as have occurred in other jurisdictions that have passed similar legislation. Still, employers should begin considering how to revise their employee handbooks and benefits policies to ensure compliance with the Time to Care Act. Additionally, employers are reminded that in this newly remote-hybrid environment they must comply with all applicable state laws wherever they have employees working entirely remotely; the Time to Care Act appears to apply even if an employer has only one employee working remotely in Maryland. As always, the growing variety of state programs and their differing levels of employee benefits may pose problems for employers operating on a national scale. For assistance crafting an employee handbook or a benefits policy that complies with all applicable laws, please contact the authors of this article or any other attorney in Venable's Labor and Employment Group.