By Michael Phillips | MDBayNews
Maryland workers and businesses have another mandatory cost coming, and it will show up directly in payroll beginning next year.
Starting Jan. 1, 2027, Maryland’s Family and Medical Leave Insurance program — FAMLI — begins collecting contributions from employers and employees.
The initial state-plan rate is 0.9% of wages, up to the Social Security wage cap. Employers can withhold up to half of that amount from employees, meaning workers could pay 0.45% of their wages, while larger employers generally cover the remaining 0.45%.
For a worker earning $60,000 a year, a 0.45% employee contribution would equal about $270 annually.
But here is the part Annapolis should have to explain clearly: Marylanders begin paying in January 2027, while benefits do not begin until January 2028.
The state says that one-year collection period is necessary to build up the FAMLI trust fund before claims are paid.
Once benefits begin, eligible Maryland workers will generally be able to receive up to 12 weeks of job-protected paid leave for events including childbirth, serious medical conditions, and caring for certain family members. Benefits can reach $1,000 per week.
And the initial 0.9% rate is not guaranteed to stay there. Maryland Labor will recalculate the contribution rate annually, and state law currently allows the total rate to rise as high as 1.2% of covered wages.
Supporters call FAMLI an insurance program that gives workers financial protection when family or medical emergencies strike.
But from the perspective of businesses and workers, the practical effect is straightforward: another mandatory payroll cost imposed by Annapolis.
Employers face higher labor expenses. Workers can see another deduction from their checks. And Maryland will collect that money for a full year before anyone can receive a benefit.
That matters in a state already struggling with affordability, competition for businesses and continued economic pressure from federal workforce reductions.
Some critics are calling FAMLI a roughly $2 billion tax increase. That number needs a clearly sourced projection before it should be treated as established fact.
The rest does not.
Starting in 2027, Maryland will begin taking a new slice of payroll from workers and employers — and the program does not start paying benefits until a year later.
Annapolis may call it an insurance contribution.
For many Marylanders looking at their paycheck, it will look a lot like another tax.
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