Maryland’s Time to Care Act—What Employers Need to Know
by Kaitlin Paddy and Ruth Rauls
Effective October 1, 2023, employees in the State of Maryland will soon become eligible to enjoy partially paid leave funded by contributions to an insurance pool made by both employees and their employers under the Maryland Time to Care Act of 2022. Employees will be eligible to begin receiving benefits on January 1, 2025. The Maryland Department of Labor (the “Department”) is expected to issue regulations to provide guidance by June 1, 2023
What is the Time to Care Act (“TTCA”) and what benefits are employees entitled to receive?
The TTCA provides up to twelve weeks of benefits to employees who worked at least 680 hours over the last 12 months for any of the following reasons:
- Care for a newborn child or a child newly placed for adoption, foster care, or kinship care with the covered individual during the first year after the birth, adoption, or placement
- Care for a family member with serious health conditions
- Attend to a serious health condition that results in the covered individual being unable to perform the functions of the covered individual’s position
- Care for a service member with a serious health condition resulting from military service who is the covered individual’s next of kin
- Attend to a qualifying exigency arising out of the deployment of a service member who is a family member of the covered individual.
Significantly, an employee who received 12 weeks of benefits for the care of a newborn child or child newly placed for adoption, foster care, or kinship care may be eligible to receive an additional 12 weeks of benefits in the same year if the employee becomes eligible for benefits to attend to the employee’s serious health condition that results in the employee being unable to perform the functions of their job. Similarly, an employee who received 12 weeks of benefits to attend to the employee’s serious health condition in which they were unable to perform the functions of their job may also be eligible to receive an additional 12 weeks of benefits in the same year if the employee becomes eligible for benefits to care for a newborn child or child newly placed for adoption, foster care, or kinship care.
The weekly benefit amount paid to the covered individual is calculated as follows:
- If the employee’s average weekly wage (the total wages received over the last 680 hours divided by the number of weeks worked) is 65% or less than the State average weekly wage (determined by the Department annually), the weekly benefit amount is 90% of the employee’s average weekly wage.
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If the employee’s average weekly wage is greater than 65% of the State’s average weekly wage, the weekly benefit amount will be the sum of 90% of the employee’s average weekly wage up to 65% of the State average weekly wage plus 50% of the employee’s average weekly wage that is greater than 65% of the State average weekly wage.
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The weekly benefit amount shall be at least $50 and, for the 2025 calendar year, it may not exceed $1,000. For subsequent years, the Secretary of the Department will announce the maximum benefit amount.
- If an employee takes a partially paid leave, the weekly benefit is the lesser of (1) the amount required to make up the difference between the wages paid to the employee while taking partially paid leave, and the full wages normally paid; and (2) if the employee’s average weekly wage is greater than 65% of the State average weekly wage, the sum of 90% of the employee’s average weekly wage up to 65% of the State average weekly wage plus 50% of the employee’s average weekly wage that is greater than 65% of the State average weekly wage.
What are the employer contribution requirements?
Beginning October 1, 2023, each employer with 15 or more employees shall contribute to the fund. At the time of publication, the Secretary of the Department has not yet set the rate of contribution.
May an employer opt out of contributing?
Yes. An employer may satisfy the requirements through a private employer plan consisting of employer-provided benefits, insurance, or a combination of both if the private employer plan is offered to all of the employer’s eligible employees and meets or exceeds the rights, protections and benefits provided to a covered employee. The private employer plan shall be filed with the Department for approval. An employer that provides covered employees with a private employer plan and an employee that is covered by a private employer plan is exempt from contributions to the insurance fund. At this time, additional regulations regarding the opt-out procedure and requirements have not been determined.
What if the employer provides a leave policy?
An employee must exhaust employer-provided leave that is not required to be provided under law before receiving benefits under TTCA.
Can an employee waive the right to receive these benefits under the TTCA?
No, an agreement to waive these rights is void as against public policy, and an employee’s rights to benefits may not be diminished by a collective bargaining agreement or by an employer policy.
How does this policy relate to Federal Family and Medical Leave Act?
If an individual takes leave and is receiving benefits under TTCA, the leave runs concurrently with eligible leave that may be taken under FMLA.
Does an employer need to provide the employee with notice of the benefits under TTCA?
Yes, an employer must provide written notice to each employee of rights and duties of the employee under the TTCA at the time of hire and annually thereafter.
When an employee requests to leave, or when an employer knows that an employee’s leave may be for a reason under this title, the employer shall notify the employee of their eligibility to take leave within five business days. The notice shall include:
- the right of an eligible employee to receive program benefits
- the procedure for filing a claim for benefits
- an eligible employee’s responsibilities with respect to providing notification prior to the commencement of leave and any penalties for failing to do so
- the right of an employee to file a complaint for alleged violations
- the right of an employee to job protection, and
- a description of the prohibited acts, penalties, and complaint procedures
The Department will develop standard notices for employers to use.
Does the employee have to provide notice to the employer prior to taking leave under the TTCA?
Yes, if the need to use leave is foreseeable, an employer may require a covered employee taking leave to provide the employer with written notice of the employee’s intention to take leave at least 30 days before commencing the leave. If the need is not foreseeable, the employee shall provide notice to the employer as soon as practicable and generally comply with the employer’s notice or procedural requirements for requesting or reporting leave, if those requirements do not interfere with the employee’s ability to use leave for which benefits may be paid. A covered employee may also take leave on an intermittent leave schedule.
Is there a penalty for an employer who fails to make required contributions?
Yes, if an employer fails to pay contributions due to the fund, the Secretary of Labor may assess the amount of contributions and interest due, make an additional assessment in an amount not to exceed two times the contributions withheld, as a penalty for failure to pay the contributions due, and order an audit of the employer for the immediately following fiscal year to investigate and determine compliance.
Employees may also file a written complaint with the Department that the employer has violated the TTCA. The Department of Labor and the Secretary of Labor will investigate all claims.
Conclusion
As we await the anticipated June 1, 2023, regulations issued by the Maryland Department of Labor, we encourage you to reach out to us with any questions regarding the Time to Care Act and how it may impact your company and its leave policies.
