Maryland’s paid family and medical leave program is almost here, and as compliance deadlines loom employers must pay close attention to developing guidance. On Nov. 4, the Maryland Department of Labor’s Family and Medical Leave Insurance (FAMLI) Division issued a 2026 Required Employee Notice Template and policy guidance on the mandatory contribution withholding notice. Employers must issue this notice to employees at least one pay period before payroll deductions begin Jan. 1, 2027. In practice, that means employers must issue the notice before the last paycheck next month.

The contribution withholding notice is mandatory for every Maryland employer. That includes employers that intend to contribute to the state plan, even if they intend to pay the full employee contribution in addition to the employer contribution, and employers that will apply for a private plan. Even employers intending to use a private plan will be required to begin withholding employee contributions Jan. 1. While these contributions will be held in escrow rather than remitted to the FAMLI Division with Quarterly Wage and Hour Reports, the withholding must begin Jan. 1.  

The notice includes FAMLI basics such as employee eligibility, benefits, contributions, payroll mechanics and employee protections. It requires minor customization where the employer must fill in the percentage of the employee’s pay it intends to withhold, which cannot exceed 0.45%. The notice must be provided in writing and, while it is not required, the FAMLI Division suggests that employers get individual employee acknowledgments that they received and understand the notice.

While getting this notice out might feel like one more piece of paperwork before year-end, it’s an important compliance step. Most importantly, missed employee deductions cannot be collected later if an employer fails to collect at the time wages are paid. You do not want to end up on the hook for both employer and employee contributions because you failed to issue these notices and start timely deductions. 

Next Steps for Employers

• Complete employer registration if you have not yet done so and submit a Declaration of Intent by Nov. 15 if you intend to apply for a private plan.
• Decide how much of the 0.45% employee contribution you will withhold.
• Complete the template and distribute it before the last December paycheck.
• Collect signed acknowledgments, keep them on file and add the notice to new-hire onboarding.
• Set up payroll to start deductions on Jan. 1.

Note on Contribution Withholdings for First Payroll of 2027 

When payroll contribution withholding begins in January, some employers may be asking how to handle the first payroll of the year where an employee earned wages for work performed in December but paid in January. Should the employer apply the contribution rate to the entire pay period for wages paid after Jan. 1 or only to wages paid for hours worked on Jan. 1 and after? While a reasonable interpretation of a program beginning Jan. 1 would be that only wages paid for time beginning Jan. 1 are at issue, the FAMLI Division’s notice and regulations do not carve this out.

We contacted the FAMLI Division and requested policy guidance on this scenario. For the time being, employers should review their end-of-year pay period and confer with their payroll administrator to confirm their ability to apply the contribution rate to only wages earned after Jan. 1, should that be the ultimate guidance from the division. 

Miles & Stockbridge’s Labor & Employment team will continue to monitor FAMLI rollout and compliance and is available to answer any questions.

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