In April 2022, Maryland enacted the Time to Care Act which provides an eligible employee with up to 12 weeks of paid leave for baby bonding, to care for a family member, for one’s own serious health condition, or a qualifying military exigency. Contributions were to begin October 1, 2023 with benefits available beginning January 1, 2025.
On May 3, 2023, Governor Moore signed into law amendments to the Time to Care Act. Below is a summary of the key changes to the law.
Funding
Contributions to the paid family and medical leave insurance fund were to begin on October 1, 2023 and will now begin October 1, 2024. For employers employing 15 or more employees, contributions to the program are to be split 50/50 between employer and employee.
Employers employing 14 or fewer employees need not contribute to the program, only the employee contributes his/her share. In either instance, the employer may but is not required to pay some or all of the employee’s share of the premium.
The contribution rate shall be in effect from October 1, 2024 until June 30, 2026 and cannot exceed 1.2% of the employee’s wages and shall be applied to all wages up to and including the Social Security wage base. Contribution rates will be set on an annual basis on or before each February 1, and that rate will be in effect for a 12-month period beginning on July 1 of the same year.
Benefits
Paid leave benefits were to become available January 1, 2025 and will now become available January 1, 2026. For the 12-month period beginning January 1, 2026, the weekly benefit amount shall not exceed $1,000. Starting January 1, 2027, the maximum weekly benefit will be adjusted annually to reflect the annual percentage growth of the area’s Consumer Price Index.
The amendments expand the definition of family member for whom leave may be taken to include domestic partner of the covered employee.
Interaction with other laws
The amendments clarify that paid leave taken pursuant to this law runs concurrently with FMLA if applicable.
The amendments clarify that a covered individual may not be required to exhaust or use certain paid leave benefits (vacation, PTO, and sick leave) before or while receiving paid leave benefits. However, the employer and employee can agree to use available paid time off to supplement earnings not covered by the paid leave program.
The Department of Labor has created a new Family and Medical Leave Insurance webpage where implementing regulations will be posted on or before January 1, 2024.Employers will want to keep an eye on this.
The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.