Maryland to Deduct Benefits From Paychecks Before Workers Can Use Them
Maryland will start taking money from workers’ paychecks in 2027 for a paid family leave program that won’t pay benefits until 2028.
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Maryland is set to begin deducting money from workers’ paychecks in January 2027 to fund a paid family leave program that will not provide benefits until a full year later. The state’s Family and Medical Leave Insurance (FAMLI) program, which was established through the Time to Care Act in 2022, has faced repeated delays since its creation. Originally scheduled to begin paying benefits in January 2025, the program’s timeline has been pushed back to January 1, 2028, when eligible workers can begin receiving up to 12 weeks of paid, job-protected leave.
Workers and Employers to Contribute to FAMLI
Under the FAMLI program, workers will be required to contribute up to 0.45% of their wages, with larger employers generally contributing an additional 0.45%, bringing the combined rate to 0.9%. Maryland officials argue that the yearlong collection period is necessary to build an insurance reserve, ensuring the program remains financially sustainable. The Maryland Department of Labor defended the arrangement, stating that collecting contributions ahead of benefit payments is essential to prepare for the program’s launch.
The first quarterly contributions are due April 30, 2027, and will go directly into a dedicated insurance fund. The department explained that this fund will be used exclusively for paid leave benefits and administration, as mandated by Maryland law. Employers and employees are setting aside money now, so it will be available when they need it the most, the department said.
Political Backlash and Concerns Over Funding
Former Maryland state Del. Dan Cox, the Republican nominee for governor, has criticized the program, arguing that the deductions should be suspended. Cox, who opposed the original legislation during his time in the Maryland House of Delegates, questioned whether requiring workers to contribute for an entire year before receiving benefits was justified. He told the Daily Caller News Foundation (DCNF) that it is not.
Cox also raised concerns about the program’s funding and financial oversight. He emphasized that transparency is essential and called on the governor to bring the program online for public scrutiny. He further criticized the mandatory nature of the program, arguing that participation should be voluntary rather than imposed on workers and businesses.
While the program is mandatory for most employers, businesses with fewer than 15 employees are generally exempt from paying the employer portion of the contribution. However, they must still collect and remit applicable employee contributions. Employees cannot individually opt out of coverage, although employers may use qualifying private plans.
Delays and Financial Scrutiny
The FAMLI program has faced repeated delays since its creation in 2022, with its current timeline setting January 1, 2028, as the date eligible workers can begin receiving benefits. Originally scheduled to start in 2025, the program’s launch has been postponed multiple times, raising concerns about its implementation and financial sustainability.
A Maryland legislative budget analysis identified $51.4 million in FAMLI administrative funding for fiscal 2026 and $70.1 million for fiscal 2027, representing a 36.4% increase. These figures reflect budgeted funding rather than a verified accounting of actual expenditures. The program’s implementation costs have drawn scrutiny, with critics calling for greater transparency and oversight.
Gov. Wes Moore’s office and the offices of Maryland House Speaker Joseline Peña-Melnyk, House Majority Leader David Moon, Senate President Bill Ferguson, and Senate Majority Leader Nancy King did not respond to DCNF requests for comment. The offices of Republican House Minority Leader Jason Buckel and Senate Minority Leader Steve Hershey also did not respond.
Legal and Administrative Challenges
The program was established through the Time to Care Act, which lawmakers passed over then-Republican Gov. Larry Hogan’s veto in 2022. Hogan had criticized the measure, calling it an “irresponsibly crafted, rushed piece of legislation” and warning that it would impose additional costs on Maryland employers and employees. He also questioned whether the state was prepared to administer the program, citing a lack of a statutory payroll deduction cap or cost-sharing formula.
Lawmakers overrode Hogan’s veto the following day, signaling their commitment to the program despite the governor’s concerns. The program’s financial sustainability remains a key point of contention, with critics arguing that the state must ensure that the dedicated insurance fund is adequately funded and transparently managed.
The DCNF has a pending Maryland Public Information Act request seeking additional records concerning FAMLI’s finances, implementation costs, and contribution-rate assumptions. The request is intended to provide greater clarity about the program’s financial preparations ahead of the January 2027 payroll deductions.
Public and Political Reactions
Cox’s criticism highlights the broader political debate over the program’s structure and funding. While supporters argue that the contributions are necessary to ensure the program’s long-term viability, opponents like Cox argue that the mandatory nature of the program and its delayed benefits are unjustified.
As the program moves closer to implementation, the state faces the challenge of balancing the need for financial preparation with the expectations of workers and employers. The success of FAMLI will depend on its ability to deliver on its promise of paid family leave while maintaining financial stability and public trust.
Source: Daily Caller
