Maryland Becomes Tenth State to Enact a Law Establishing a Paid Family Leave Program
April 25, 2022
Author: Jessica Milli
On April 9, 2022, legislators in Maryland overrode Governor Larry Hogan’s veto and enacted the Time to Care Act of 2022, making Maryland the tenth state (plus the District of Columbia) to offer paid family and medical leave to workers.
Paid family and medical leave is an essential support that enables individuals to take care of themselves and their family members without worrying that taking time away from work will jeopardize their family’s economic security. The economic, social, and health-related consequences of a lack of a national paid family and medical leave program in the U.S. have only been magnified since the beginning of the COVID-19 pandemic when the absence of paid leave and other work-family supports pushed many women out of the workforce in order to fill gaps in their families’ caregiving needs and millions more needed leave to care for themselves or their families but were unable to take it. A lack of access to paid leave disproportionately impacts women, who are often the primary caregivers for their families. This is particularly true for women of color, whose earnings are critical to their families’ economic security.
The Maryland paid family and medical leave program is an important step towards providing workers with the supports they need to meet their families’ caregiving needs without sacrificing their economic security. Effective implementation of the program can also contribute to greater social and economic equality in the State by addressing existing inequities in access to paid leave, allowing more economically vulnerable populations to take the leaves that they need, and reducing the wages lost while on leave.
The need for paid leave in Maryland
R2I analysis of data from Worker Paid Leave Usage Simulation Model (Worker PLUS) shows that, prior to the passage of the Time to Care Act of 2022, an average of 51% of all leaves needed in Maryland are either not taken or taken without pay each year. This highlights how a lack of a paid leave program up until now has forced families to make impossible choices about whether to take time away from work and lose pay in order to care for themselves or their family members, or to let their caregiving needs go unmet in order to provide economic security for their families.
Family caregiving leaves are the most likely to be needed but not taken in Maryland, with 37% of all ill child and ill parent leaves needed but not taken and 51% of ill spouse leaves needed but not taken. Conversely, new child bonding leaves and maternity disability leaves are far more likely to be taken, even without pay (Figure 1).
The Worker PLUS data also highlight dramatic disparities in who is able to take leave and who has access to paid leave. Men, for example, tend to be slightly less likely than women to need leave but not take it and slightly more likely to take leave with at least some pay, though significant differences exist by type of leave. Similarly, white workers are substantially less likely than Black workers to need a leave but not take it and are more likely to receive at least some pay while on leave (Figure 1).
Figure 1. Distribution of Maryland Workers Who Needed Leave by Leave Type, Whether Leave Was Taken, and Whether Pay Was Received, 2018
*Chart defaults to presenting data for all workers regardless of gender or race/ethnicity. To see the data displayed for a specific group, check the relevant box in the figure. Multiple selections may be made by holding down the control button while checking each box.
Source: R2I analysis of output data retrieved from the Worker PLUS model. See U.S. Department of Labor, “Microsimulation Model on Worker Leave,” available at https://www.dol.gov/agencies/oasp/evaluation/completedstudies/Microsimulation-Model-on-Worker-Leave (last accessed April 2022).
Even among Maryland workers who are able to take leave, many take leave without pay or only partial pay from their employers, which can put them and their families in a difficult financial position.
R2I’s analysis of the Worker PLUS data shows that Maryland workers lose $894 million per year on average due to lost wages while on leave, with a disproportionate economic impact felt among women of color ($306 million).
Maryland’s new paid family and medical leave program represents an opportunity to address some of the long-standing social and economic inequalities in the state, increasing the number of workers who are able to take the leaves they need to care for themselves and their family members by providing them with a source of income to sustain themselves while away from work.
About the Program
Below is a summary of the key features of the Maryland paid family and medical leave program. More details on specific features of the program can be found in the bill text.
Who is eligible?
All individuals who work for an employer in the state, including state and local government workers, are covered by the program. Self-employed individuals may also opt-in for coverage by purchasing a paid family and medical leave insurance policy through an approved insurance carrier, but must pay both the employer and employee portion of the payroll tax. Individuals must have been employed and worked at least 680 hours in the 12 months prior to the start of leave in order to be eligible.
What can workers take leave for?
Under the new program, workers can take up to 12 weeks of paid leave per year for the following reasons:
To care for and bond with a newborn child
To care for a child after their placement through foster care, kinship care, or adoption
To care for a family member with a serious health condition
To attend to one’s own serious health condition
To care for a military service member who is next of kin with a serious health condition resulting from their service
To attend to exigencies arising out of the deployment of a service member who is a family member
Individuals may take an additional 12 weeks per year if they have need of leave for both the birth or placement of a child and their own serious health condition, making the maximum amount of leave available to them 24 weeks per year.
How much pay will workers receive while on leave?
The wage replacement rate in the Maryland paid family and medical leave program follows a tiered system in which lower-income workers are able to receive a greater share of their usual weekly earnings while on leave. Under the program, workers taking leave will receive 90% of their average weekly wages up to 65% of the state average weekly wage and 50% of their average weekly wage that is greater than 65% of the state’s average weekly wage up to a maximum of $1000 per week.
How is it funded?
The Maryland program will be funded by payroll taxes that are split between employers and employees. The total contribution rate will be set every two years as will the percentage paid by employers and employees. In no year will employees pay more than 75% or less than 25% of the total contribution rate. Employers with fewer than 15 employees are exempt from paying the employer portion of the total contribution, though employees at such businesses are still required to pay the employee portion.
What’s Next?
After years of debate, the State of Maryland has finally joined the ranks of states with their own paid family and medical leave programs in place. While workers will not be able to start claiming benefits until January 1, 2025, education and outreach efforts should begin as soon as possible to ensure that workers are aware of the program, what benefits they are entitled to, how to apply for leave, and what their rights are when requesting leave. Such efforts should also ensure that employers are aware of the program, what their new obligations are, and what rights their employees have under the program. Previous research documenting the experiences of other states in implementing new paid family and medical leave programs has shown that the design of such outreach programs can have a significant impact on the overall success of the program.
Regular data collection and analysis should also be a feature built into the program’s design in order to ensure that education and outreach efforts are working as intended as well as to ensure that program access is equitable. Program leaders should consider developing key metrics to summarize program usage, including number of claims, average leave length, and average benefit amount by leave type, gender, race/ethnicity, income level, geographic area, and other social or economic groups of interest. Regular analysis and evaluation of such data could indicate whether certain groups are more or less likely to participate in the program and whether more targeted education and outreach is needed.
Finally, since 9 states and the District of Columbia have already passed laws establishing paid family and medical leave programs, program developers in Maryland should look to these states for lessons learned in design and implementation when designing their program. By learning from the experiences of other states, program leaders in Maryland can build a program that incorporates best practices that have already been identified and that runs more efficiently and effectively as a result.
Methodology
The analysis in this column makes use of output data from the Worker Paid Leave Usage Simulation (Worker PLUS) model developed for the U.S. Department of Labor by IMPAQ International and the Institute for Women’s Policy Research. The Worker PLUS model uses data from the Family and Medical Leave Act employee survey to model worker leave-taking behaviors and outcomes, simulating those behaviors and outcomes onto the Maryland sample in the American Community Survey (ACS).
Because of the large sample size and rich set of demographic information about respondents in Maryland, the ACS output data from the Worker PLUS model allows for a detailed analysis of the need for leave, leave-taking behaviors, and whether any pay is received while on leave in a way that has not previously been possible due to data limitations. Data on worker leave-taking patterns, their wages, and whether they received pay on leave—as well as how much pay was received—allowed R2I to estimate the total amount of wages lost by workers in Maryland while on leave.
