Maryland 2025 Legislative Session Employment Updates

Maryland’s Main 2025 Employment Law Changes at a Glance

Although only a few core employment measures crossed the finish line, each one requires careful policy review. The amendments affect payroll planning, leave administration, employee eligibility, hiring practices, and the way employers define military service.

HB 102 Delays Maryland FAMLI Implementation

House Bill 102 made the most significant change of the session by postponing Maryland’s Family and Medical Leave Insurance program, commonly called FAMLI. The program was created by the Time to Care Act and has already traveled through several implementation schedules. In 2025, lawmakers moved the starting line again.

When Will FAMLI Contributions Begin?

Mandatory contributions are now scheduled to begin on January 1, 2027, rather than July 1, 2025. Employers will eventually collect any authorized employee portion through payroll and remit contributions under procedures established by the Maryland Department of Labor.

The delay gives employers roughly 18 additional months before payroll contributions begin. That is helpful breathing room, but it is not permission to throw the FAMLI preparation binder into the Chesapeake Bay. Payroll systems, benefits contracts, employee notices, and leave-coordination rules will still require substantial work.

When Will Employees Receive Benefits?

HB 102 authorized the Maryland Secretary of Labor to establish the benefit start date within a statutory window ending January 3, 2028. Current state guidance points to January 2028 as the launch period for employee benefits.

Once operational, the program is expected to provide eligible employees with up to 12 weeks of partially paid, job-protected leave during a benefit year. Qualifying reasons include an employee’s serious health condition, care for a family member, bonding with a new child, and certain needs related to a family member’s deployment.

In a limited situation, an employee may qualify for an additional 12 weeks when the employee both welcomes a child and experiences a serious personal health condition during the same benefit year. Consequently, total FAMLI leave can reach 24 weeks in those special circumstances rather than functioning as the normal annual entitlement.

How Much Will FAMLI Pay?

Benefits will replace a portion of the employee’s weekly wages, subject to the program’s statutory formula and maximum benefit. Maryland’s published program information describes benefits of up to $1,000 per week during the initial implementation period.

The contribution rate that applies when the revised program launches must be established under the updated statutory schedule. Employers should rely on the final rate announced by the Maryland Department of Labor instead of permanently hard-coding an earlier estimate into payroll software.

The New “Anchor Date” Matters

HB 102 introduced the term “anchor date” to help determine the wage period used for benefit calculations. The anchor date generally refers to the earlier of the date an employee completes the benefit application or the date FAMLI leave begins.

This sounds like a technical detailand it isbut technical details are where payroll headaches like to build vacation homes. Employers and administrators will need systems capable of capturing accurate leave dates, wages, hours, and application information.

What About Small Employers?

FAMLI coverage is broad and extends to employers with Maryland employees. However, employers with fewer than 15 employees generally are not required to pay the employer share of the contribution. Their employees remain covered and may still be responsible for the employee portion.

That distinction is important. “Not required to make the employer contribution” does not mean “completely exempt from FAMLI.” Small employers may still face registration, reporting, notice, payroll, leave, and job-protection responsibilities.

Self-Employed Marylanders

HB 102 also changed the timeline for an optional self-employed enrollment program. The Department of Labor must develop regulations governing contributions, enrollment, and benefits for participating self-employed residents. Additional details are expected as Maryland approaches the full program launch.

HB 895 Expands Protections for Uniformed Services

The Employment and Insurance Equality for Service Members Act modernizes terminology throughout multiple sections of Maryland law. Instead of limiting certain protections to traditional references such as the “armed forces” or National Guard, the law adopts broader concepts involving the “uniformed services.”

The revised definition includes the Army, Navy, Air Force, Marine Corps, Space Force, Coast Guard, commissioned officers of the National Oceanic and Atmospheric Administration, and the Public Health Service. Relevant reserve components are also included.

Why the Definition Change Is Important

An employee serving in the Public Health Service or NOAA may not fit the mental picture that some managers have when they hear the word “military.” Under the revised law, that outdated assumption can produce a compliance problem.

The broader terminology affects a collection of employment-related rights and programs, including deployment leave, apprenticeship credit, unemployment benefits, licensing provisions, hiring preferences, and future eligibility for military-related FAMLI leave.

Deployment and Return Leave

Maryland law provides qualifying employees with leave when an immediate family member departs for or returns from certain active-duty service. HB 895 expands the categories of service that may trigger those rights.

Employers should revise policies that refer only to the Army, Navy, Air Force, Marines, Coast Guard, or National Guard. A broader reference to Maryland’s statutory definition of uniformed services will reduce the risk that a manager unintentionally denies a protected request.

Veteran and Spouse Hiring Preferences

The legislation also supports specified hiring preferences for eligible veterans and certain spouses. The covered categories may include the spouse of an eligible veteran with a service-connected disability, a surviving spouse, or the spouse of a full-time active service member.

A preference permitted by law is not the same thing as an automatic hiring requirement. Employers using such a preference should define it in writing, apply it consistently, and ensure that recruiters understand the qualifying categories.

SB 785 Clarifies the Maryland Parental Leave Act

The Maryland Parental Leave Act generally requires covered employers with 15 to 49 employees to provide eligible workers with up to six weeks of unpaid parental leave during a 12-month period. Leave may be used for the birth, adoption, or foster placement of a child.

Eligible employees generally must have worked for the employer for at least 12 months and completed at least 1,250 hours of service during the preceding 12 months. Employers must also maintain qualifying group health coverage during the leave, subject to the law’s requirements.

The FMLA Overlap Problem

The federal Family and Medical Leave Act applies to private employers that employ at least 50 employees during 20 or more workweeks in the current or preceding calendar year. Because federal and Maryland laws use current-year and prior-year headcount tests, a growing or shrinking employer could technically fall within both sets of coverage rules.

For example, an employer might have had 52 employees during the previous year but only 45 during the current year. The prior-year count could keep the business covered by the federal FMLA while its current headcount appears to place it within Maryland’s 15-to-49-employee parental leave law.

What SB 785 Changed

Effective October 1, 2025, the Maryland definition of a covered employer excludes an employer that is covered by the federal FMLA for the current calendar year. The amendment is designed to prevent overlapping state and federal employer classifications from creating confusion about whether six weeks of state parental leave must be added to federal leave.

The change does not eliminate parental leave rights. An employer covered by the federal FMLA must continue complying with federal requirements, including up to 12 weeks of unpaid, job-protected leave for qualifying employees and continued group health benefits under the required conditions.

Headcount Tracking Is Essential

Employers should not determine coverage by glancing at today’s payroll roster. Both laws use measurements involving 20 or more workweeks and may examine the current or preceding calendar year.

HR departments should document weekly employee counts, worksite locations, and the dates on which coverage thresholds are met. This is particularly important for seasonal businesses, rapidly expanding companies, government contractors, and employers that recently completed layoffs.

Maryland Employer Compliance Checklist

Update the Legal Compliance Calendar

Record the January 1, 2027 contribution date and the January 2028 FAMLI benefit launch period. Add earlier internal deadlines for payroll testing, budgeting, employee communication, vendor selection, and private-plan analysis.

Review Leave Policies Together

Do not update FAMLI, FMLA, parental leave, paid time off, short-term disability, workers’ compensation, and military leave policies in isolation. These programs can overlap, and inconsistent language may accidentally promise more leaveor less leavethan intended.

Audit Military-Service Definitions

Replace narrow references to military branches with language broad enough to include all uniformed services covered by Maryland law. Update request forms, manager guides, hiring preference policies, and benefits documents.

Document Annual FMLA Coverage

At the beginning of each calendar year, determine whether the organization is covered by the federal FMLA. Preserve the data supporting that conclusion. An employer’s obligations may change even when its current headcount looks nearly identical to last year’s.

Train Front-Line Managers

Supervisors should know that employees do not need to recite the name of a statute to raise a potentially protected leave issue. A statement such as “My spouse is being deployed next week” or “We just received an unexpected foster placement” should be directed to HR rather than answered with a casual no.

Practical Implementation Experiences and Lessons

The following composite examples illustrate the practical experiences employers may encounter while implementing the Maryland 2025 employment updates.

Experience One: The Payroll Project That Was “Canceled”

Consider a Maryland employer with 120 employees that had already created payroll codes for FAMLI deductions, scheduled employee notices, and budgeted for an employer contribution beginning in July 2025. When HB 102 delayed the program, a manager suggested canceling the project and revisiting it in late 2026.

The better response would be to pause the launch while preserving the work. Payroll configuration can remain in a testing environment, contracts can be reviewed for revised implementation dates, and the benefits team can continue evaluating the state plan against approved private-plan alternatives. That approach prevents the company from paying for an obsolete rollout without forcing it to rebuild the entire project later.

The lesson is that a statutory delay changes the timeline, not the destination. Employers that completely dismantle their preparation may discover that 2027 arrives with the speed of a Monday morning meeting nobody remembered scheduling.

Experience Two: The Employer With a Changing Headcount

Imagine a technology contractor that employed 54 people for much of 2024 but fell to 43 employees in 2025 after losing a federal contract. Before SB 785, the employer might appear to be covered simultaneously by the FMLA because of its prior-year workforce and the Maryland Parental Leave Act because of its smaller current workforce.

Under the clarified rule, the company should first determine whether it is covered by the federal FMLA for the current calendar year. If it is, it is excluded from the Maryland Parental Leave Act’s employer definition for that year. HR must still evaluate each employee’s individual FMLA eligibility, including months of service, hours worked, and worksite requirements.

The practical lesson is that employer coverage and employee eligibility are separate questions. A company may be covered by the FMLA even though a particular employee does not satisfy the individual eligibility test. HR software rarely explains that distinction with the charm and patience of an experienced leave administrator.

Experience Three: The Unexpected Uniformed-Service Request

Suppose an employee asks for leave because a sibling serving with the Public Health Service is returning from qualifying active duty. A supervisor who relies on an old handbook may conclude that the request is not protected because the relative is not in a traditional military branch.

HB 895 makes that assumption risky. The expanded uniformed-services definitions require employers to look beyond familiar branch names and evaluate the actual service category, relationship, deployment, and employee eligibility requirements.

A well-trained supervisor should forward the request to HR, avoid promising or denying leave on the spot, and document when the request was received. HR can then apply the correct Maryland policy, request permitted documentation, and notify the employee of the decision.

Experience Four: Communicating Without Creating Confusion

Employees may hear that “Maryland paid leave was delayed” and assume no workplace leave rights exist until 2028. Employers should clearly explain that the FAMLI delay does not suspend existing rights under the federal FMLA, Maryland sick and safe leave laws, employer-provided benefits, disability plans, military leave protections, or the Maryland Parental Leave Act.

The most effective communication is layered. A short employee announcement can explain the revised dates, while a more detailed HR guide can address eligibility, payroll contributions, benefit coordination, and whom employees should contact. Clear communication is not merely friendly; it reduces inconsistent promises, payroll disputes, and preventable retaliation claims.

Taken together, these experiences demonstrate that the greatest compliance risk is often not the statute itself. It is the gap between the statute, the written policy, the payroll system, and the manager who receives the first request. Maryland employers that connect those four points will be far better prepared for the next phase of implementation.

Conclusion

The Maryland 2025 legislative session produced targeted rather than sweeping employment-law changes. HB 102 postponed the FAMLI timeline and revised important administrative rules. HB 895 broadened protections involving veterans, military families, and the uniformed services. SB 785 resolved a confusing overlap between the Maryland Parental Leave Act and the federal FMLA.

Employers should use the additional FAMLI preparation time wisely. Updating policies, tracking employee counts, reviewing payroll systems, and training managers now will cost considerably less than attempting emergency compliance after a leave request or agency complaint arrives.

In employment law, “we thought the old rule still applied” is rarely a winning defense. It is, however, an excellent opening line for a very expensive meeting.