Maryland FAMLI for staffing agencies introduces important new requirements for firms operating in the state. Maryland’s Paid Family and Medical Leave (PFML) program, administered as Family and Medical Leave Insurance (FAMLI), establishes employer obligations related to registration, payroll contributions, reporting, and employee leave. This guide summarizes the current program structure, key requirements, contribution timeline, and regulatory changes adopted in 2026.
Overview
Maryland’s PFML program was established under the Time to Care Act of 2022. It provides paid leave benefits to eligible employees, including temporary and staffing agency employees, funded by employer and employee payroll tax contributions. The program applies to all employees and carries job protection and anti-retaliation requirements.
Key Provisions and 2026 Changes
Eligibility and coverage. All employees, including temporary employees and staffing agency workers, are covered under PFML. Staffing agencies must treat temporary employees as eligible for PFML on the same terms as their internal permanent employees.
Leave entitlement. Employees are eligible for up to 12 weeks of PFML in an application year, with a maximum payment of up to 480 hours at the employee’s regular rate of pay. An additional 12 weeks may be available in certain circumstances, subject to the same 480-hour maximum.
Concurrent leave. Leave taken under PFML runs concurrently with eligible leave under the federal Family and Medical Leave Act (FMLA).
Parental leave transition. Beginning July 1, 2026, parental leave of absence under COMAR 17.04.11.29 is no longer available. PFML is the applicable leave for qualifying purposes.
Reporting and recordkeeping. Employers using an approved private FAMLI plan (in lieu of the state plan) must maintain records — including leave applications, approvals, denials, and related wage and contribution data — for at least five years.
Private plan alternative. Employers considering an approved private plan instead of the state plan must submit a Declaration of Intent to the FAMLI Division by November 15, 2026.
Regulatory amendments. The PFML regulations were amended effective March 16, 2026, June 23, 2026, and August 31, 2026. Up-to-date employer requirements are published at paidleave.maryland.gov/employers.
Employer Registration
Employers can now register for the program through the state’s paid leave website. Registration is the latest step in the phased rollout of the insurance program:
- Registration: open now
- Payroll deductions begin: January 2027
- First quarterly report and contribution payment due: April 30, 2027
- Benefits available to eligible employees: 2028
If you have at least one employee in Maryland, you are required to register. There are no exceptions. Register online at paidleave.maryland.gov.
Contribution Rates and Cost Sharing
Each year, the Maryland Department of Labor (MD Labor) sets the contribution rate for the state plan based on actuarial estimates, ensuring the program remains financially sustainable.
MD Labor set the initial contribution rate at 0.9% of wages up to the Social Security wage cap, split equally between employer and employee (0.45% each). This rate applies to wages paid from January 1, 2027 through December 31, 2027. Private plans may be structured differently.
A few points worth noting:
- Employers participating in the state plan are not individually charged more based on their employees’ use of benefits.
- Employers may withhold up to 50% of the contribution rate from employee paychecks.
- The contribution rate is the same for both exempt (salaried) and non-exempt (hourly) employees.
- Small employers with fewer than 15 total employees are responsible for remitting only 50% of the contribution rate.
- Employers may choose to pay the full contribution amount on behalf of their employees. There may be tax implications, so consult a tax professional before making this decision.
Collecting and Remitting Contributions
Contributions are collected through payroll deductions for all employees working in positions localized in Maryland. All employees working within Maryland must participate, there are no exceptions, and employees cannot opt out, even if they may not ultimately qualify for benefits.
In practice, this means an employer (or the payroll provider acting on its behalf) must deduct the employee contribution during payroll processing, accrue the employer portion where applicable, and remit funds along with the required reporting to the State of Maryland. If you work with a payroll service provider, confirm which of these steps they will handle and which remain your responsibility.
FAMLI is an insurance program. Contributions from employers and employees are used to pay benefits for approved claims. Employees are not reimbursed for contributions made to the program, even if they never apply for benefits.
Quarterly reporting and payment schedule
FAMLI contributions and required wage and hour reports are due electronically every quarter through paidleave.maryland.gov, starting in April 2027. Contributions are due on the last day of the month following each quarter, so each remittance covers the previous three months of wages.
The first contribution payment, covering wages paid January 1 – March 31, 2027, is due April 30, 2027.
Notifying Your Employees
Separate from the payroll deduction and remittance process, employers are responsible for notifying employees about FAMLI. Required notices must be provided:
- At hire
- Annually
- At least 30 days before any change to your FAMLI procedures
- Whenever an employee’s leave may qualify for benefits
You must also provide written notice at least one full pay period before payroll withholding begins.
This overview is provided for general informational purposes and does not constitute legal, tax, or accounting advice. Program requirements continue to evolve; consult the Maryland FAMLI Division and your own advisors for guidance specific to your organization.
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Frequently Asked Questions About Maryland FAMLI for Staffing Agencies.
Below are answers to some of the most common questions about FAMLI for Staffing Agencies.
What is Maryland FAMLI for Staffing Agencies?
Maryland FAMLI for staffing agencies is part of the state’s Family and Medical Leave Insurance program, which provides eligible Maryland workers with paid, job-protected leave for qualifying family and medical reasons. Staffing firms with employees working in Maryland need to comply with the program’s employer requirements.
Do Staffing Agencies Have to Register for Maryland FAMLI?
Yes. A staffing agency with at least one employee working in a position localized in Maryland must register for FAMLI. Initial registration must be completed by an authorized officer of the employer.
When Do Maryland FAMLI Payroll Deductions Begin?
Payroll deductions and contributions are scheduled to begin January 1, 2027. Employers participating in the state plan may withhold up to half of the 0.9% contribution rate from employees, or up to 0.45% of covered wages.
How Much Will Maryland FAMLI Cost Staffing Agencies?
For 2027, Maryland has set the total state-plan contribution rate at 0.9% of wages up to the Social Security wage cap. Generally, employers and employees split the contribution equally at 0.45% each. Employers with fewer than 15 total employees have different employer contribution requirements.
Are Temporary Employees Covered by Maryland FAMLI?
Employees working in positions localized in Maryland are subject to FAMLI contributions, including workers who may not ultimately qualify to receive benefits. To qualify for benefits beginning in 2028, an employee generally must have worked at least 680 hours in a Maryland-localized position during the applicable four-quarter period.
When Do Maryland FAMLI Benefits Begin?
Maryland FAMLI benefits are scheduled to become available January 1, 2028. Eligible workers may receive up to 12 weeks of job-protected paid leave annually for qualifying family and medical reasons.
What Reporting Requirements Apply to Maryland FAMLI for Staffing Agencies?
Staffing agencies must submit quarterly wage and hour reports electronically through Maryland’s FAMLI system beginning in April 2027. Employers participating in the state plan will also remit their FAMLI contributions quarterly.
When Is the First Maryland FAMLI Contribution Payment Due?
The first quarterly FAMLI payment is due April 30, 2027, covering wages paid from January 1 through March 31, 2027. Subsequent contributions are due on the last day of the month following each quarter.
Can a Staffing Agency Use a Private Plan Instead of the Maryland FAMLI State Plan?
Yes. Employers can use a FAMLI Division-approved private plan that meets or exceeds the benefits and service provided by the state plan. Employers seeking the 2027 private-plan pathway must follow Maryland’s Declaration of Intent and subsequent application requirements.
Can a Payroll or Back-Office Provider Handle Maryland FAMLI Requirements for a Staffing Agency?
A Third-Party Agent can assist with certain FAMLI responsibilities, including quarterly wage and hour reporting and remitting contributions, once properly authorized. However, the staffing agency’s authorized officer must complete the employer’s initial FAMLI registration.
What Should Staffing Agencies Do Now to Prepare for Maryland FAMLI?
Staffing agencies should register for FAMLI, review which employees are localized in Maryland, prepare their payroll systems for 2027 deductions, determine how employer and employee contributions will be handled, and establish procedures for quarterly reporting and employee notices. Agencies should also determine whether they will participate in the state plan or pursue an approved private plan.
How Should Staffing Firms Prepare for Maryland FAMLI for Staffing Agencies?
Staffing firms should prepare for Maryland FAMLI for staffing agencies by registering with the state, reviewing which employees are localized in Maryland, updating payroll processes, and preparing for employee deductions and employer contributions beginning in January 2027. Employers should also establish procedures for quarterly reporting, employee notices, and leave administration.
Does Maryland FAMLI for Staffing Agencies Apply to Temporary Employees?
Yes. Maryland FAMLI for staffing agencies can apply to temporary employees working in positions localized in Maryland. Staffing firms should account for these employees when preparing payroll deductions and required wage and hour reporting. Eligibility to receive benefits is determined separately based on Maryland’s eligibility requirements.
When Do Contributions Begin Under Maryland FAMLI for Staffing Agencies?
Contributions under Maryland FAMLI for staffing agencies begin with wages paid starting January 1, 2027. For employers participating in the State Plan, the initial total contribution rate is 0.9% of wages up to the Social Security wage cap, generally split equally between the employer and employee.
What Payroll Changes Are Needed for Maryland FAMLI for Staffing Agencies?
Maryland FAMLI for staffing agencies requires staffing firms to prepare their payroll systems to calculate and collect applicable employee contributions, account for the employer portion, and support required quarterly reporting. Because staffing companies may process payroll for large numbers of temporary employees, having these processes established before deductions begin will be especially important.
