With the 2023 Legislative Session rapidly approaching, MACo is profiling some major issues that stand to gather attention in the General Assembly’s work. Here, we preview the implementation of the Time to Care Act.
During the 2022 legislative session, the General Assembly established the Family and Medical Leave Insurance Program (FAMLI Program) via legislation known as “The Time to Care Act of 2022.” That law provides up to 12 weeks of paid leave and benefits to an employee in Maryland who takes leave from employment for certain eligible medical and family care reasons.
According to the law, the Maryland Department of Labor (MDL) must implement the program and complete initial study and program development requirements before contributions to the program begin on October 1, 2023, and claims for benefits begin on January 1, 2025. Notably, the MDL is to recommend key details of the program like employer/employee contribution rates by June 2023.
Every Maryland county, as an employer, will be legally required to participate in the program or to seek an exemption from the State if the county provides an equal benefit.
The Department of Legislative Services (DLS) looked at the pending program in their 2022 issue papers:
The program provides up to 12 weeks of benefits to a covered individual who is taking leave from employment due tocaring for certain family members, the individual’s own serious health condition, or a qualifying exigency arising out of a family member’s military deployment. The weekly benefit is based on an individual’s average weekly wage and is indexed to inflation. Required contributions to the program, which are shared between employers and employees, are also based on employee wages. Generally, employers with 15 or more employees must contribute to and participate in the program – although employers may instead demonstrate to MDL that they maintain a private plan that meets or exceeds the rights, protections, and benefits under the State-administered program.
MDL must establish the new program using general funds until monies from required contributions become available. The fiscal 2023 budget provides $10.0 million in general funds for this purpose. Contributions to the program must begin October 1, 2023, and claims for benefits must be allowed beginning January 1, 2025. Based on the size of Maryland’s workforce, the Department of Legislative Services (DLS) has previously estimated benefit payments of $333.1 million in fiscal 2025 and at least $685.1 million annually thereafter.
DLS notes the timeline for implementing the FAMLI Program and reports that MDL is working with neighboring states who have implemented similar benefit programs:
In preparation for implementation of the FAMLI Program, MDL advises that it is participating in monthly meetings with other states that have passed similar laws establishing paid family leave programs. During these meetings, MDL has exchanged information relating to program administration and has begun coordination with counterparts in Washington, D.C., and Delaware to establish a cooperative relationship aimed at enforcing potentially overlapping programs. Such coordination will be necessary as many workers in the region work in one jurisdiction while living in another. MDL further advises that it has begun meeting with interested stakeholders to understand their particular concerns and obtain knowledge from their expertise.
What it means for counties
MACo, in conjunction with the Maryland Municipal League (MML), the Maryland Association of Boards of Education (MABE), and the Public Schools Superintendents Association of Maryland (PSSAM) sent MDL leadership a letter in December outlining ongoing concerns and open questions about the implementation and requirements of the program.
That letter stresses the difficulty of complying with the current implementation timeline:
This means that local governments will not know many of the critical details of the law and requirements of its implementation – including the mandatory employer and employee contribution rates – until June, but will need to have a program fully built out and ready to start collecting contributions only four months later by October. Similarly, entities that plan to seek an exemption from the Department of Labor by offering an equal or superior benefit will only have four months from learning the legal requirements of the law to establish an alternative benefits program, submit that plan for approval from the Department, and ready the program for contributions.
Not only is this logistically challenging, but also is potentially impossible for local governments to navigate. Some counties, for example, will be required to seek approval from their governing body to establish the new benefit, plus budgetary approval to fund employer contributions and any costs associated with establishing and implementing the benefit. Likewise, local boards of education may have to seek comparable support from county governments.
Furthermore, the current timeline is surely not sufficient for the Department of Labor to adequately consider and rule on said applications for exemption.
MACo and its partner signatories also posed a series of questions for the MDL to answer ahead of the June 2023 regulatory recommendations due date, including whether or not the Department could provide details on exemption processes ahead of June so employers can prepare applications.
During the 2023 session of the General Assembly, lawmakers should consider the complexities outlined in the letter and offer greater guidance ahead of implementation so that counties and other employers can act with the best understanding and support. Legislators should specifically consider technical assistance for employers to do so and should better detail a policy and a process for employers to seek exemption from participating in the statewide FAMLI Program.
Stay tuned to Conduit Street to see how this issue and othes are taken up during the 2023 legislative session.
Read the full DLS issue papers (analysis of The Time to Care Act starts on page 125).