Household Employees Eligible for Paid Family and Medical Leave under New Maryland Law

 

Update: The new effective date for employer and employee contributions will be October 1, 2024. The start date for benefits payments to covered employees has been pushed back to January 1, 2026.

Paid family and medical leave is coming soon for household employees in Maryland.

Here’s what families with household help – like a nanny, housekeeper, or nanny share – need to know about the new compliance requirement.

Maryland establishes family and medical leave program

With the passage of the Time to Care Act, Maryland will establish a Family and Medical Leave Insurance Program (FAMLI) that covers just about all employers and full- and part-time workers in the state including household employers and their workers. The state’s legislature overrode Governor Larry Hogan’s veto to pass the law making Maryland the tenth state as well as Washington, D.C. to enact a paid family and medical leave law that covers private-sector workers.

Household employees who have worked at least 680 hours over the 12-month period immediately preceding the start date of their leave will have up to 12 weeks of paid time off annually for qualified reasons.

Workers can receive up to 90 percent of their weekly wages in benefits up to $1,000/week. Lower-income employees will receive a greater percentage of their wages than higher earners. Paid leave benefits will be paid directly by the state to eligible employees.

Benefits will be available beginning January 1, 2025.

The law will be funded through a payroll tax that is scheduled to begin on October 1, 2023. Since only employers with 15 or more workers will need to contribute to paid leave, household employers likely will not need to pay this tax. However, all workers – no matter the size of the employer – will need to contribute through a payroll deduction.

The state’s Department of Labor will determine the tax rate no later than June 1, 2023.

Qualified reasons for paid leave

Eligible employees may take paid leave for the following reasons:

• Caring for a child during the first year after the child’s birth or after the placement of the child through adoption, foster care, or kinship care,
• Caring for a family member with a serious health condition,
• Attending to their own serious health condition that results in being unable to perform the functions of their position.
• Caring for a service member with a serious health condition resulting from military service who is an employee’s next of kin; and
• Attending to an employee’s “qualifying exigency” arising out of the deployment of a service member who is a family member.

“Family member” is defined to include an employee’s:

• Child (including a ward or one for whom the employee has legal or physical custody or guardianship or stands in loco parentis);
• Parent or legal guardian (including one who acted as a parent or stood in loco parentis to the employee when the employee was a minor);
• Spouse;
• Grandparent;
• Grandchild; and
• Sibling.

“Family member” also includes the ward, parent, or legal guardian of an employee’s spouse or one who acted as a parent or stood in loco parentis to the spouse when the spouse was a minor. All these relationships include biological, adopted, foster, and step-relations.

A “qualifying exigency” is defined to include events and matters related to military deployment.

Employees may take paid leave intermittently in increments of at least four hours. But they must also:

• Make a reasonable effort to schedule the intermittent leave in a manner that does not unduly disrupt their employer’s operations; and
• Provide the employer with reasonable and practicable prior notice of the reason why the intermittent leave is necessary.

A family may require their employee to provide written notice at least 30 days before taking paid leave when the necessary time off is foreseeable. Otherwise, a household worker must provide notice to the family as soon as practicable.

A household employee could possibly receive up to 24 weeks of paid leave if they receive benefits for caring for a child during the child’s first year and then need medical leave for their own serious health condition.

Other requirements for household employers and workers

Employees should exhaust their available paid time off – such as vacation time or other paid leave – before receiving FAMLI benefits.

Families are not allowed to terminate an employee on protected leave without cause unless they would otherwise suffer “substantial and grievous economic injury.”

Families will also need to provide written notices to their employees on their rights under the program at the time of hire and then annually. The state will create a standard notice for employers.

GTM can help

As paid family and medical leave programs – like the one in Maryland – continue to spread across the country, household employers face increasing compliance requirements. GTM Payroll Services can help families navigate their legal obligations while managing their nanny payroll and tax responsibilities. Call (800) 929-9213 for a complimentary, no-obligation consultation with a household employment expert to see how GTM can eliminate the hassles of paying your nanny and withholding and remitting taxes. Or schedule time with us at your convenience.

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