The Maryland Department of Labor is proposing to delay the Family and Medical Leave Insurance (FAMLI) implementation amid federal uncertainty.

With current law set to start payroll deductions in July of 2025 and roll out benefits in 2026, the proposed changes would delay payroll deductions until January 1, 2027, with benefits beginning on January 1, 2028. This move aims to give employers and workers additional time to prepare while Maryland navigates economic uncertainty.

The original legislation, passed in 2022 and refined in 2023, had called for an earlier implementation (with benefits by January 2025), but practicalities moved the Department to seek, and receive, a first delay to prepare for and launch the program. But, these decisions and changes were made prior to the potential dramatic workplace uncertainty arising from federal workers in Maryland.

Concerns have been raised by stakeholders, including counties, about the feasibility of implementing the program under the existing framework. Employers, workers, and policymakers have expressed the need for more time to establish an efficient and effective system that ensures smooth administration and accessibility. The proposed delay would allow the Department to refine its digital platform, strengthen financial systems, and increase awareness efforts to better support both employers and employees.

From the Department:

“State agencies like MD Labor are laser-focused on supporting Marylanders as we all respond in real-time to the cascading impacts of federal decisions,” said Maryland Department of Labor Secretary Portia Wu. “This focus includes our efforts to provide critical support for employees of federal agencies, organizations that rely on federal funding, and impacted employers and employees in the private sector.”

Under the new recommended plan from the Department:

• Payroll deductions would begin January 1, 2027

• Benefits would become available on January 1, 2028

In anticipation of the delay, MD Labor will be pausing any announced regulatory timelines for FAMLI, including the process for applying to use a private plan (originally scheduled to be rolled out in May 2025) and submitting wage and hour reports.

This proposed change will require legislative action by the General Assembly in the coming weeks, and a bill will likely be introduced soon.

Read the full press release here.

Stay tuned to the Conduit Street for more information.