Maryland’s paid family leave program was delayed once more as counties secured key changes, but the path forward still depends on upcoming actions from the State.

Three takeaways

• The Maryland General Assembly passed a bill in the 2025 legislative session to delay the Time to Care Act / Family and Medical Leave Insurance (FAMLI) program.
• The bill did include a provision requested by MACo and the Collaborative to exclude local government employers from having to deduct and hold money in escrow for employer and employee contributions to cover the cost of the State plan.
• The next step for counties and stakeholders is to wait for the Maryland Department of Labor to release proposed regulations.

In 2022, the Maryland General Assembly passed the Time to Care Act, establishing the Family and Medical Leave Insurance (FAMLI) program to develop a statewide mandate requiring virtually all employers with at least one Maryland-based worker to provide up to 12 weeks of paid family and medical leave per year. In some circumstances, a worker could qualify for up to 24 weeks of leave annually. The original legislation outlined that contributions would begin on October 1, 2023, and benefits would be rolled out on January 1, 2025. The program was later refined in 2023 to delay implementation, allow contribution splits between employers and employees, and the General Assembly also set contribution rate caps, among other changes.

In 2023, MACo joined with the Maryland Association of Boards of Education (MABE) and the Maryland Municipal League (MML) to develop a collaborative joint venture to streamline the offering of qualified family leave benefits on behalf of interested member jurisdictions. Bolton is the collaborative’s program administrator.

Three years later, after multiple delays, the program’s full implementation is still on the horizon, pushed back again during the 2025 legislative session as state agencies and stakeholders work to align policy, administration, and practicality.

What was the status of FAMLI prior to the 2025 legislative session?

Heading into the 2025 legislative session, Maryland’s FAMLI program had already experienced multiple delays. At that time, payroll contributions were scheduled to begin in July 2025, with benefits slated to roll out in 2026. Despite the updated timeline, significant concerns lingered. The State had missed several key regulatory deadlines, and employers, including counties as public employers, had received minimal guidance on how to prepare. Many stakeholders questioned the State’s overall administrative readiness to launch such a large and complex program.

For counties in particular, the looming implementation raised serious financial and logistical concerns, especially for those planning to opt out of the State plan through a qualified private plan, as permitted under the law. As it stood, even public employers pursuing a private option were still expected to begin collecting contributions toward the State program. This approach was both illogical and burdensome, particularly amid the mounting budget pressures many local governments were already facing.

What changes were made to the FAMLI program during the 2025 legislative session?

The 2025 session opened with some uncertainty surrounding the future of Maryland’s Family and Medical Leave Insurance (FAMLI) program. For months, there had been speculation about whether the program’s looming deadlines, payroll deductions set to begin in July 2025 and benefits to launch in 2026, might prompt legislative action.

Early in the session, Minority Leader Senator Hershey introduced a bill to delay FAMLI by two years. While the bill’s prospects were slim, the concept of delay resonated deeply with many stakeholders.

Then in February, the conversation shifted meaningfully. The Maryland Department of Labor formally proposed an 18-month delay to FAMLI’s implementation, citing uncertainty at the federal level and the practical reality that the program was not yet ready for prime time. The proposed revision would shift payroll deductions to January 1, 2027, and benefit availability to as late as January 2028. The delay would also pause regulatory timelines, like private plan applications and wage reporting, giving employers more breathing room and the Department more time to build the digital and financial infrastructure required to deliver a functional system.

From the outset, counties raised red flags about the feasibility of launching the program on its original timeline, especially given recent fiscal pressure, administrative strain, and the risk of layering on new payroll responsibilities for a program many public employers would choose a private plan rather than the State plan. MACo and other stakeholders emphasized that more time was essential, not only to get the system right, but to ensure that private plan pathways were viable and well-regulated.

As the session progressed, MACo closely tracked legislative vehicles that could carry the delay forward. One such bill, HB 1503, initially applied to State employees but appeared promising as a possible vehicle for broader implementation changes. MACo testified in support of HB 1503 with amendments, urging legislators to ensure that local governments pursuing Equivalent Private Insurance Plans (EPIPs) would not be forced to make payroll deductions unnecessarily in the interim.

MACo and the Collaborative engaged key members of the Economic Matters Committee, the Department of Labor, and committee leadership to ensure that local government concerns were addressed. Eventually, attention turned to another bill, HB 102, which proved a better vehicle for a more comprehensive fix. MACo submitted testimony in strong support with amendments to HB 102, emphasizing the need for both the delay and relief from the so-called “escrow requirement.” The escrow requirement would have required local employers to collect and hold funds for a State plan they didn’t intend to use. Local governments who intend to offer an EPIP through a private insurance carrier will not be required to pay premiums until the actual start date for benefits. The final legislation reflected key wins for counties and the Collaborative.

• A new contribution start date of January 1, 2027, for the default State-run program

• Benefits set to begin sometime between January 1, 2027, and January, 2028, as determined by the Secretary of Labor (likely 2028)

• Elimination of the escrow requirement for public employers pursuing EPIPs, relieving them from collecting and holding contributions prior to their own plan implementation

The result was a more realistic timeline, a reduced administrative burden, and a clear path forward for local governments that plan to provide paid family leave through private carriers. These changes position Maryland’s FAMLI program for a smoother and more successful rollout, one that balances readiness with flexibility and avoids unnecessary financial strain on counties.

Next steps

Some of the next steps for Maryland’s FAMLI program remain uncertain and will depend heavily on forthcoming actions from the State and the Maryland Department of Labor. At this stage, stakeholders are awaiting proposed regulations from the Department, which will eventually be followed by final regulations. These rules will provide the critical guidance needed for counties and other employers to make informed decisions about participation.

Once regulations are in place, counties planning to pursue a private plan will need to submit formal declarations of intent to opt out of the State plan. While the program’s timeline has shifted, the new date for when contributions to the State-run plan are scheduled to begin is January 1, 2027. For those seeking to offer an Equivalent Private Insurance Plan, the coming months will be important for preparing to meet equivalency standards and ensuring compliance.

In the meantime, counties should stay engaged with MACo and the Collaborative for updates, resources, and support as the process unfolds. MACo will continue to provide timely information as new developments occur.

Click to view MACo’s testimony on HB 102 – Family and Medical Leave Insurance Program – Revisions.

More MACo coverage on FAMLI from the 2025 session.

Click here to view the Maryland Time to Care Act Collaborative Webinar.

This article is part of MACo’s Deep Dive series, where expert analysts explore and explain the top county issues of the day. A new article is added each week – read all of MACo’s Deep Dives.