Maryland FAMLI: You Have to Register Now, Even Though Benefits Start in 2028
Key takeaways
- If you have even one employee in Maryland, you are required to register for FAMLI. Registration is open now and there are no exceptions under state law.
- Payroll deductions begin January 2027. The first quarterly report and payment are due April 2027. Benefits do not start until January 2028.
- The initial contribution rate is 0.9% of wages up to the Social Security cap, split evenly at 0.45% employer and 0.45% employee.
- Your payroll company cannot register for you. Third party agents can take over the quarterly work afterward, but the employer has to create the account.
- Employer size counts every employee under your EIN, including those outside Maryland. Ten staff in Gaithersburg and eight in Virginia makes you an eighteen employee company, not a small employer.
Most Maryland employers we speak to have filed this one under 2028. It is a 2027 payroll problem, and one piece of it is a today problem.
Maryland’s Family and Medical Leave Insurance program, FAMLI, will eventually give workers up to 12 weeks of paid, job protected leave at up to $1,000 per week. That part starts in January 2028. But the obligations on employers start well before then, and the first one is already live.
The dates that actually matter
| When | What you have to do |
|---|---|
| Now | Register. Any employer with at least one Maryland employee must have a FAMLI account. Registration is open |
| January 2027 | Begin withholding employee contributions through payroll |
| April 2027 | First quarterly wage and hour report, and first contribution payment |
| July 2027 | Begin giving employees the required notice, six months before benefits open |
| January 2028 | Employees can start taking leave and claiming benefits |
The gap between registering and paying anything is more than a year. That is exactly why it slips.
What it costs
Maryland set the initial rate at 0.9% of wages, up to the Social Security wage cap. It is split evenly: 0.45% from the employer and 0.45% from the employee. That rate applies to wages paid from 1 January 2027 through 31 December 2027.
From November 2027 the state will announce a new rate each year. By statute the total cannot exceed 1.2% of wages.
You may choose to pay the employee share yourself. There are tax implications to that, so it is worth a word with your accountant before you decide.
The small employer rule, stated correctly
This is the part we see explained wrongly most often, including by AI summaries.
Employers with fewer than 15 employees are small employers. A small employer is not exempt from the employer share. What actually happens is that a small employer remits only 50% of the total rate, and may withhold that entire amount from employee pay.
So the practical difference is not that you pay nothing. It is that your total remittance is halved and you are permitted to fund it entirely from payroll deductions.
Two traps worth knowing about now
Your payroll provider cannot register for you. Third party agents, which includes payroll companies, PEOs, CPAs and benefits administrators, are explicitly blocked from creating the account on your behalf. The state did this deliberately so employers keep ownership of the account. Once you have registered, your provider can be granted power of attorney and take over quarterly reports, contributions and claims responses.
If you are assuming your payroll company has handled this, check. They cannot have.
Employer size counts your out of state people. FAMLI determines size by counting every employee under the same federal EIN, inside Maryland and outside it. A Rockville firm with 11 Maryland employees and 6 in Virginia is a 17 employee company and does not qualify for the small employer rate. Independent contractors do not count.
During 2027 the state recalculates your size each quarter from your wage and hour report, so a company sitting near the threshold can move in and out of small employer status through the year.
The private plan option
You can apply to use a private plan instead of the state plan. If approved, you stop remitting contributions to the state, but you still file wage and hour reports and claims data every quarter, and you must keep applications, outcomes, benefits paid, reconsideration requests and wage reports for at least five years.
A private plan may charge a higher rate than the state plan, but it cannot charge employees more than the state plan would. Whether it is worth it depends on your workforce and your existing disability and leave arrangements, which is a real analysis rather than a quick answer.
What we would do in the next month
- Register, if you have not. It is the only item with no lead time and no one else can do it for you.
- Count your employees properly, across every state, under your EIN. That number decides your rate.
- Tell your payroll provider you have registered and ask what they need in order to be granted power of attorney.
- Put January 2027 in the payroll calendar, not 2028. That is when money starts moving.
- If you already offer paid parental leave or short term disability, note where FAMLI will overlap. That is a plan design conversation for your next renewal, not something to solve today.
We are based in Gaithersburg and most of our clients are Maryland employers, so this one is landing on our desk as much as yours. If you want a second set of eyes on where FAMLI meets your existing leave and disability coverage, that is a conversation rather than a presentation.
Frequently Asked Questions
Does every Maryland employer have to register for FAMLI?
Yes. If you have at least one employee in Maryland you are required to register, and the state is explicit that there are no exceptions under the law. Registration is open now.
When do FAMLI payroll deductions actually start?
January 2027. The first quarterly wage and hour report and the first contribution payment are both due in April 2027. Benefits themselves do not become available to employees until January 2028.
What is the FAMLI contribution rate?
The initial rate is 0.9% of wages up to the Social Security wage cap, split evenly between employer and employee at 0.45% each. It applies to wages paid during the 2027 calendar year. From November 2027 Maryland will set the rate annually, and it cannot exceed 1.2% of wages.
Can our payroll company register for FAMLI on our behalf?
No. Third party agents including payroll providers, PEOs and CPAs cannot register for you. The employer has to create the account. After that you can grant your provider power of attorney so they can file quarterly reports, remit contributions and respond to claims.
We have 10 employees in Maryland and 8 in Virginia. Are we a small employer?
No. FAMLI counts every employee under the same federal EIN, including those working outside Maryland, so that is an 18 employee company. Small employer status applies below 15 total employees. Independent contractors are not counted.
What does small employer status actually change?
It does not exempt you from the employer share. A small employer remits 50% of the total contribution rate rather than the full amount, and may withhold that entire amount from employee pay. All other obligations, including registration and quarterly reporting, are the same.
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