SENATE BILL 485
K3

4lr2985
CF HB 571

By: Senator Hayes
Introduced and read first time: January 23, 2024
Assigned to: FinanceCommittee Report: Favorable with amendments
Senate action: Adopted
Read second time: February 28, 2024
CHAPTER ______
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AN ACT concerning

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Family and Medical Leave Insurance Program – Modifications

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FOR the purpose of modifying provisions of law governing application, administration, andenforcement of the Family and Medical Leave Insurance Program, including
provisions related to the payment of contributions, the calculation of the average
weekly wage, the submission of claims for benefits, the application of the Program
to self–employed individuals, the Family and Medical Leave Insurance Fund, thesatisfaction of Program requirements through private employer plans or insurance,
and the use of contributions or other funding by the Secretary of Labor; and generally
relating to the Family and Medical Leave Insurance Program.

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BY repealing and reenacting, without amendments,
Article – Labor and Employment
Section 8.3–101(a) and (j)Annotated Code of Maryland(2016 Replacement Volume and 2023 Supplement)

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BY repealing and reenacting, with amendments,
Article – Labor and Employment
Section 8.3–101(d) and (r), 8.3–102, 8.3–201(b)(1), 8.3–302, 8.3–403(a) and (d),8.3–406(a) and (b)(5), 8.3–503, 8.3–601(a)(1), (b), and (c)(1), 8.3–701(a)(1),
8.3–703(a) and (b)(3), 8.3–705, 8.3–903, 8.3–905(a) and (b), and 8.3–906
Annotated Code of Maryland(2016 Replacement Volume and 2023 Supplement)

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.

*sb0485*

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SENATE BILL 485

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BY adding to
Article – Labor and Employment
Section 8.3–403(e)Annotated Code of Maryland(2016 Replacement Volume and 2023 Supplement)

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SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:8

Article – Labor and Employment

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8.3–101.

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(a)

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(d)

“Covered employee” means an employee who has worked at least 680 hours
PERFORMING SERVICES UNDER EMPLOYMENT LOCATED IN THE STATE over the[12–month period] FOUR MOST RECENTLY COMPLETED CALENDAR QUARTERS FOR
WHICH QUARTERLY REPORTS HAVE BEEN REQUIRED immediately preceding the dateon which leave is to begin.

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(j)
“Fund” means the Family and Medical Leave Insurance Fund establishedunder § 8.3–501 of this title.

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(r)

In this title the following words have the meanings indicated.

“Wages” means all compensation that is due for employment that is:(1)

for an employee[:

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(i)

an hourly wage or a salary;

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(ii)

a commission;

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(iii)

compensatory pay;

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(iv)

severance pay;

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(v)

standby pay;

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(vi)

a tip or gratuity;

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(vii)

holiday or vacation pay; or

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(viii) any other paid leave, including sick leave, that is paid to theemployee entirely by the employer], WAGES AS DEFINED IN § 8–101 OF THIS ARTICLE;orSENATE BILL 485

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(2)

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for a self–employed individual[,]:

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(I)

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(II)

INCOME, PAY, OR LEAVE LISTED UNDER ITEM (1) OF THISSUBSECTION THAT IS WAGES, AS DEFINED IN § 8–101 OF THIS ARTICLE, EARNEDFROM A C CORPORATION OR AN S CORPORATION IF THE INCOME, PAY, OR LEAVE IS
PAID TO THE OWNER WHO IS THE SOLE EMPLOYEE OF A C CORPORATION OR AN SCORPORATION.

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8.3–102.

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(a)

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(1)

This subsection does not apply to the disclosure of information to:(i)a public employee in the performance of the public employee’s(ii)

the individual to whom the information relates; [or]official duties;

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self–employment income, as defined in 26 U.S.C. § 1402(b); OR(iii) if an authorized representative has the signed authorization of
the individual to whom the information relates, the authorized representative; OR

(IV)

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EMPLOYERS WHOSE EMPLOYEES HAVE FILED CLAIMS WITH
THE DEPARTMENT FOR THE PURPOSE OF CLAIMS ADMINISTRATION.

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IDENTIFYING information relating to:(2)

An employee of the Department may not disclose PERSONAL

(I)

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an individual who has applied for or received benefits under thistitle;

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23(II) AN INDIVIDUAL WHOSE EMPLOYMENT DATA HAS BEENSUBMITTED TO THE DEPARTMENT BY THE INDIVIDUAL’S EMPLOYER UNDER THISTITLE; OR

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25(III) A SELF–EMPLOYED INDIVIDUAL WHO SUBMITTED DATA TO
THE DEPARTMENT UNDER THIS TITLE.

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(b)
This title preempts the authority of a local jurisdiction to enact a law on orafter June 1, 2022, that establishes a paid family and medical leave insurance program for
employees of an employer other than the local jurisdiction.

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8.3–201.

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(b)
(1)
A self–employed individual WHO IS A RESIDENT OF THE STATE mayelect to participate in the Program by filing a written notice of election with the Secretaryin accordance with regulations adopted by the Secretary.

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8.3–302.

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The purpose of the Program is to provide temporary benefits to a covered individual
who is taking leave from employment:

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(1)
(i)
to care for or bond with a child of the covered individual during
the first year after the child’s birth; or

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(ii)
during the process through which a child is being placed with thecovered individual through foster care, kinship care, or adoption and to care for and bondwith the child during the first year after the placement;

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(2)

to care for a family member with a serious health condition;

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(3)
because the covered individual has a serious health condition that
results in the covered individual being unable to perform the functions of the covered
individual’s position;

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to care for a service member [who is] FOR WHOM the covered[individual’s] INDIVIDUAL IS next of kin; or

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(5)
because the covered individual has a qualifying exigency arising out ofthe deployment of a service member who is a family member of the covered individual.

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8.3–403.

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(a)
The Secretary, in consultation with other State agencies and relevant
stakeholders, shall:

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(1)
subject to subsection (b) of this section, adopt regulations necessary to
carry out this title;

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(4)

(2)

establish procedures and forms for filing claims for benefits, including:

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(i)
procedures for notifying an employer within 5 business days after
any of the following occurs:

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claim for benefits;

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benefits is processed;

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an employee files an electronic application regarding a2.

an employee’s paper application regarding a claim for

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a determination regarding a claim for benefits is made;

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an appeal for a determination regarding a claim forbenefits is filed; or

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a change is made to a determination regarding a claim forbenefits; and

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(ii)
notices of elections by self–employed individuals for benefits
under § 8.3–201 of this title;

89(3) ESTABLISH PROCEDURES AND FORMS FOR ELECTRONIC FILINGOF REPORTS, NOTICES, AND OTHER REQUIRED DOCUMENTS BY EMPLOYERS;

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[(3)] (4)use information–sharing and integration technology to facilitate
the disclosure of relevant information or records needed for the administration of this title;
and[(4)] (5)13
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education program.

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(d)
(1)
The Secretary may use a portion of the funds paid under § 8.3–601 of
this title or other available funding to:

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(I)
pay for and carry out the requirements under subsection [(a)(4)](A)(5) of this section; OR
(II)

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subject to subsection (d) of this section, carry out a public

ISSUE GRANTS.

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(2)
Materials used in the public education program required undersubsection [(a)(4)] (A)(5) of this section shall be made available in English and Spanish.

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(E) THE SECRETARY MAY USE A PORTION OF THE FUNDS PAID UNDER §8.3–601 OF THIS TITLE OR OTHER AVAILABLE FUNDING TO AWARD GRANTS TO
FACILITATE COMMUNITY PARTNERSHIPS IN AMOUNTS THAT, IN THE AGGREGATE,DO NOT EXCEED THE AMOUNT APPROPRIATED IN THE DEPARTMENT’S ANNUAL
BUDGET FOR THIS PURPOSE.

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8.3–406.

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(a)
On or before [September 1] NOVEMBER 15 each year, the Secretary shallsubmit to the Governor and, in accordance with § 2–1257 of the State Government Article,
the General Assembly an annual report on the administration and operation of the Program
during the immediately preceding fiscal year.

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(b)

The annual report shall include information regarding:

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public outreach and technical assistance efforts, INCLUDING ANYGRANTS ISSUED UNDER § 8.3–403(D)(1)(II) OF THIS SUBTITLE;

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8.3–503.

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(a)

(5)

The Fund consists of:

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employee contributions;

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self–employed individual contributions;7(3)

employer contributions;

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(4)

APPLICATION AND APPLICATION RENEWAL FEES PAIDREQUIRED IN REGULATIONS ADOPTED UNDER § 8.3–705(B)(3) OF THIS TITLE;1011[(4)] (5)money paid to the Fund for the purpose of reimbursing theSecretary under § 8.3–902 of this title for benefits paid in error;
(6)

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AS

MONEY COLLECTED UNDER:

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(I)

§ 8.3–903(1) OF THIS TITLE FOR ASSESSED CONTRIBUTIONSAND INTEREST FOR AN EMPLOYER’S OR A SELF–EMPLOYED INDIVIDUAL’S FAILURETO PAY CONTRIBUTIONS; AND

1617(II) § 8.3–906(A)(1)(III) OF THIS TITLE FOR THE DEPARTMENT’SCOSTS OF AN APPEAL AGAINST AN EMPLOYER OR INSURER;

18[(5)] (7)interest earned on money in the Fund; and

19[(6)] (8)money received for the Fund from any other source.

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(b)

Money in the Fund may be commingled.

(c)(1) [The] SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION, THE
Fund may be used only for the purposes of this title.

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(2)

FEES PAID INTO THE FUND UNDER SUBSECTION (A)(4) OF THISSECTION MAY BE USED ONLY FOR ADMINISTRATIVE PURPOSES OF THE PROGRAM.

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8.3–601.

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(a)
(1)
Beginning [October 1, 2024] JULY 1, 2025, each employee of an
employer, each employer with 15 or more employees, and each self–employed individual
participating in the Program shall contribute to the Fund.

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Subject to subsection (a)(2) of this section, on or before [October 1, 2023]
FEBRUARY 1, 2024 2025, the Secretary shall set the total rate of contribution based on
available cost analyses of the Program.

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(2)
The rate set under paragraph (1) of this subsection shall be in effect forthe period from [October 1, 2024] JULY 1, 2025, to June 30, 2026, both inclusive.

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(c)
(1)
On or before November 15 each year, beginning in [2025] 2026, theSecretary shall conduct a cost analysis of the Program that is focused on the cost of
maintaining solvency and paying benefits to covered individuals that will be used todetermine the appropriate total rate of contribution to the Fund.

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8.3–701.

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(a)
(1)
Subject to paragraph (2) of this subsection, beginning [January] JULY
1, 2026, a covered individual taking leave from employment may submit a claim forbenefits:

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(i)
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to care for a newborn child of the covered individual during
the first year after the child’s birth; or

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2.
because a child is being placed for adoption, foster care, orkinship care with the covered individual or to care for or bond with the child during thefirst year after the placement;

(b)

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(1)

(ii)

to care for a family member with a serious health condition;

2021(iii) to attend to a serious health condition that results in the covered
individual being unable to perform the functions of the covered individual’s position;

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(iv) to care for a service member with a serious health condition
resulting from military service [who is] FOR WHOM the covered [individual’s] INDIVIDUAL
IS next of kin; or

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(v)
to attend to a qualifying exigency arising out of the deploymentof a service member who is a family member of the covered individual.

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8.3–703.

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(a)

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For the purposes of this section:(1)
the covered individual’s average weekly wage shall be calculated as thetotal wages received by the covered individual [over the last 680 hours for which the covered
individual was paid divided by the number of weeks worked] IN THE HIGHEST OF THE

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PREVIOUS FOUR COMPLETED CALENDAR QUARTERS FOR WHICH QUARTERLYREPORTS HAVE BEEN REQUIRED, DIVIDED BY 13; and

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(2)
the State average weekly wage shall be the wage calculated under §9–603 of this article.

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(b)
(3)
subsection:

The weekly benefit amount payable under paragraph (1) of this7

(i)shall be at least $50; and

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(ii)

may not exceed:
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for the [12–month] 6–MONTH period beginning [January]

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JULY 1, 2026, $1,000; and

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2.
for the 12–month period beginning January 1, 2027, andeach subsequent 12–month period, the amount determined and announced by the Secretary
under paragraph (4) of this subsection.

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8.3–705.

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(a)
(1)
An employer AUTHORIZED BY THE SECRETARY may satisfy therequirements of this title through a private employer plan consisting of employer–provided
benefits[,] OR insurance through an insurer that holds a certificate of authority issued by
the Maryland Insurance Commissioner[, or a combination of both] if the private employer
plan is [offered] PROVIDED to all of the employer’s eligible employees and meets or exceeds
the rights, protections, and benefits provided to a covered employee under this title.

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(2)
(i)
To determine the benefit amount under a private employer plan,
the weekly benefit amount shall be based on the average weekly wage earned from theemployer sponsoring the private employer plan.

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(ii)
Notwithstanding subparagraph (i) of this paragraph, if an
individual has worked less than 680 hours for the employer sponsoring the private
employer plan, the weekly benefit amount shall be based on the average weekly wage under§ 8.3–703(a) of this subtitle.

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(iii) This subsection may not be construed to prevent a private
employer plan from providing a benefit that is greater than that provided in § 8.3–703(a)of this subtitle.

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(b)
approval.

(1)

A private employer plan shall be filed with the Department forSENATE BILL 485

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(2)

(I)

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THE SECRETARY SHALL ESTABLISH REASONABLE CRITERIAFOR DETERMINING WHICH EMPLOYERS ARE AUTHORIZED TO MEETREQUIREMENTS OF THIS TITLE THROUGH EMPLOYER–PROVIDED BENEFITS.

THE

(II)

THE CRITERIA ESTABLISHED UNDER SUBPARAGRAPH (I) OF
THIS PARAGRAPH MAY INCLUDE THE EMPLOYER’S:

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1.

NUMBER OF EMPLOYEES;

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2.

CAPITALIZATION;

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3.

BONDEDNESS; AND

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STATUS AS A GOVERNMENT EMPLOYER.

(3)

THE DEPARTMENT MAY ADOPT REGULATIONS THAT ESTABLISH

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REASONABLE APPLICATION AND APPLICATION RENEWAL FEES FOR PRIVATEEMPLOYER PLANS UNDER THIS SECTION.

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(c)
An employer that provides covered employees with a private employer plan
and an employee that is covered by a private employer plan are exempt from thecontributions required under Subtitle 6 of this title.

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(d)
An employer that provides a private employer plan may not deduct from an
employee more than [the maximum] 50% OF THE contribution amount set by the
Department UNDER § 8.3–601(B) OF THIS TITLE.

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8.3–903.

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If an employer OR A SELF–EMPLOYED INDIVIDUAL fails to pay the contributions
due to the Fund, the Secretary may, in accordance with § 8.3–404 of this title:

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(1)

assess the amount of contributions and interest due;

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(2)
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

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(3)
order an audit of the employer for the immediately following fiscal year
to investigate and determine compliance with this title and Titles 3, 8, and 9 of this article.

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8.3–905.

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If an employee OR THE DEPARTMENT believes that an employer, A
SELF–EMPLOYED INDIVIDUAL, OR AN INSURER has violated this title OR
REGULATIONS ADOPTED BY THE DEPARTMENT UNDER THIS TITLE, the employee OR
(a)

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THE DEPARTMENT may file a written complaint with the [Secretary] SECRETARY’S
DESIGNEE.

345Within 90 days after the receipt of a written complaint, the [Secretary]
SECRETARY’S DESIGNEE shall conduct an investigation and attempt to resolve the issue
informally through mediation.

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(2)
(i)
If the [Secretary] SECRETARY’S DESIGNEE is unable to resolve
an issue through mediation during the period stated in paragraph (1) of this subsection andthe [Secretary] SECRETARY’S DESIGNEE determines that an employer has violated thissubtitle, the [Secretary] SECRETARY’S DESIGNEE shall issue an order.

(b)

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(1)

(ii)

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An order issued under subparagraph (i) of this paragraph:1.

shall describe the violation;

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2.
shall direct, if appropriate, the recovery of lost wages anddamages equal to the amount of wages, salary, employment benefits, or other compensation
denied or lost, and any actual economic damages;

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3.
may, in the Secretary’s discretion, seek reinstatement or
the hiring of employees with or without back pay; and

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4.
may, in the [Commissioner’s] discretion OF THE
SECRETARY’S DESIGNEE, assess a civil penalty of up to $1,000 for each employee forwhom the employer is not in compliance with this title.

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(3)
The actions taken under paragraphs (1) and (2) of this subsection are
subject to the hearing and notice requirements of Title 10, Subtitle 2 of the State
Government Article.

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8.3–906.

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(a)
(1)
(i)
The Secretary shall establish a system for appeals by covered
individuals regarding determinations of benefit amounts, benefit durations, and denials ofbenefits under this title.

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(ii)
A covered individual must file an appeal under subparagraph (i)of this paragraph within 30 days after the determination is made or benefits are denied,unless good cause can be shown for the delay.

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(III) IF A COVERED INDIVIDUAL PREVAILS IN AN APPEAL OF AN
ADVERSE DECISION OF AN EMPLOYER OR INSURER, THE DEPARTMENT MAY ASSESSTHE DEPARTMENT’S COSTS OF THE APPEAL AGAINST THE EMPLOYER OR INSURER.

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(2)
The Secretary may use the procedures under § 8–806 of this article forthe system required under paragraph (1) of this subsection.

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(b)
Judicial review of any decision with respect to benefits under this title shallbe allowed in a court of competent jurisdiction after an aggrieved party has exhausted alladministrative remedies established by the Secretary under this title.

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(c)
The Secretary shall implement procedures to ensure confidentiality of all
information related to any claims filed or appeals taken to the maximum extent allowed by
law.

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SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effectOctober 1, 2024.

Approved:________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.