Maryland employers have a new paid leave law to prepare for. The Time to Care Act (TTCA) will create paid family and medical leave benefits for many Maryland employees, including employees working for many small businesses. The good news is that there is time to prepare for this new law, as it will be phased in between 2023 and 2025. As we explain in the questions and answers below, Maryland employers have much to prepare for.
What will the TTCA do?
The TTCA will establish a paid family and medical leave program in Maryland. Covered employees will be entitled to take up to 12 weeks of leave per year for qualifying reasons, which are outlined later in this report. The TTCA also entitles employees pay benefits while on TTCA leave. Both the leave entitlement and leave pay benefits will first become available on January 1, 2025.
However, TTCA leave pay will not be paid directly from employers to employees. Instead, the TTCA creates an insurance fund. The State of Maryland will maintain and administer the fund, and employees will apply to the fund for TTCA leave pay. The insurance fund will be financed by contributions made by both employers and employees. The employer’s share of payroll contributions into the insurance will be between 25% and 75% of the total contribution, with the employee share making up the balance. The Maryland Department of Labor (DOL) will announce initial contribution rates and employer / employee percentages by June 1, 2023, and contributions into the fund will begin on October 1, 2023.
Isn’t there already a federal law providing family and medical leave?
The Federal Family and Medical Leave Act (FMLA) creates employee rights to family and medical leave, but FLMA leave is unpaid. The TTCA also will reach many employers currently not covered by the FMLA, which only applies to workplaces where an employer has 50 or more employees within a 75-mile radius. In addition, while the TTCA is similar to the FMLA, there are subtle differences between the two laws, some of which are highlighted in this report.
Which employers are covered by the TTCA?
The TTCA generally will apply to employers that have a total of fifteen or more employees and at least one employee in Maryland. The 15-employee threshold will reach many more employers than those currently covered by the federal Family and Medical Leave Act (FMLA). And by covering employers with as few as one employee in Maryland, the TTCA also will reach many out-of-state employers with even a small Maryland presence.
The TTCA allows employers to apply for exemption from the TTCA. However, exemptions will be granted only to employers who administer a leave program providing benefits at least equivalent to rights, protections and benefits provided by the TTCA and covering all of the employer’s eligible employees.
Which employees are covered by the TTCA?
The TTCA provides benefits to employees of covered employers who have worked at least 680 hours in the 12-month period before their TTCA leave is to begin. This is a lower threshold than the Federal FMLA, which sets an eligibility threshold of 1,250 hours in the 12-month period before taking FMLA leave.
The TTCA also extends benefits to certain self-employed individuals who opt-in and agree to make contributions into the insurance fund. In order to opt in, self-employed individuals must file an opt-in election with the Maryland DOL and they must participate in the program for an initial period of at least three years.
How much is the weekly pay benefit for TTCA leave?
TTCA weekly pay benefits will be calculated using a formula which takes into account the wages received by the applicant in the preceding 680 hours of work. The TTCA also establishes minimum and maximum benefit amounts. These will initially be $50 per week (minimum) and $1,000 per week (maximum). These figures will be adjusted in the future for inflation.
What qualifying reasons trigger benefits under the TTCA?
Paid leave will be available under the TTCA for five different qualifying reasons, which provide leave to:
- 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 a serious health condition;
- 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; or
- attend to a qualifying exigency arising out of the deployment of a service member who is a family member of the covered individual.
These qualifying reasons generally track the reasons for taking leave under the Federal FMLA. However, they are not absolutely identical. For example, the TTCA’s definition of “family member” includes siblings, in-laws, grandparents and other extended family members. Such relationships are covered by the FMLA only under special circumstances. Employers familiar with the Federal FMLA will want to be aware of subtle differences like these as they administer TTCA leave.
Do employees have job protection while on TTCA leave?
The TTCA generally requires employees on TTCA leave to be restored to their former positions. There are exceptions permitting employment to be terminated for “cause” and for situations in which restoring the employee to the former position would cause “substantial and grievous injury” to the employer’s operations. The TTCA does not address details (such as the meaning of “cause”), and these exceptions to the job restoration right will need to be addressed more fully in regulations from the DOL.
Does health insurance continue during TTCA leave?
Employers must keep group health plan coverage in effect for employees on TTCA leave in the same manner that coverage would have been provided if the employee had maintained continuous employment during the TTCA leave period. If the employer has been paying any portion of the employee’s premium, the employer must continue such payments during the TTCA leave. However, if the employee does not return from TTCA leave, the employer may recover the premiums paid during the employee’s TTCA leave.
Can employees take intermittent leave under the TTCA?
TTCA leave does not have to be taken on over a single continuous time period. It can be taken intermittently and can be taken in part-day increments. However, employers may require TTCA leave to be taken in minimum increments of four hours. This rule is different from the Federal FMLA, which requires employers to allow FMLA leave to be taken in the smallest increment the employer allows for any other leave (but not smaller than one hour).
Will any employees be entitled to more than 12 weeks of TTCA leave in a year?
The TTCA allows a covered individual take to 12 weeks of TTCA leave for birth or placement of a new child and 12 weeks of TTCA leave for the individual’s own serious health condition, even if all of that TTCA leave takes place in the same year.
Do employees need to provide advance notice before taking TTCA leave?
Covered employers may require employees to give at least 30 days prior written notice to take TTCA leave for foreseeable reasons. In situations where the need for TTCA leave is not foreseeable, they may require employees to provide notice “as soon as practicable.”
Are employers required to provide notices under the TTCA?
Covered employers must provide employees written notice of their rights under the TTCA at the time of hire and hen annually after that. The DOL is to prepare a standard form for the notice in the future. Whether employers use the DOL standard form or prepare their own notices, the notices must inform employees of:
- The right of an eligible employee to receive benefits under the TTCA.
- The procedure for filing a claim for benefits.
- The employee’s responsibilities to provide notice of leave and any penalties for failing to provide such notice.
- The right of an employee to file a complaint for alleged violations.
- The right of an eligible employee to job protection under the TTCA.
- A description of the prohibited acts, penalties, and complaint procedures under the TTCA.
In addition, covered employers will have a duty to notify employees of eligibility to take TTCA leave within five business days after the employee requests leave or the employer knows that requested leave may be for a reason covered by the TTCA.
How does TTCA leave interact with other leave?
The TTCA requires employees to exhaust employer-provided paid leave before receiving TTCA benefits from the insurance fund. However, the employer-provided leave will run concurrently with TTCA leave (not consecutively). The TTCA also expressly provides that TTCA leave will run with any FMLA leave that may be available.
The District of Columbia has a similar paid leave law (the Universal Paid Leave Act). The TTCA does not address questions about how the TTCA will operate in situations where employees and employers who also are covered by both the Universal Paid Leave Act and the TTCA. DOL is to provide implementing regulations for the TTCA, and regulations clarifying the interaction of these two laws would be helpful to employers in the DMV area.
How will the TTCA be enforced?
The TTCA includes several enforcement provisions. The primary enforcement mechanism is for employees to file a written complaint with DOL. DOL will investigate and attempt to resolve the complaint by mediation. If mediation fails, DOL will have broad powers to enforce the TTCA by issuing compliance orders. DOL may assess civil penalties of up to $1,000 per day per employee for which an employer is not in compliance. DOL also seek reinstatement of employees and direct employers to pay damages, including compensation and employment benefits denied or lost. If a covered employer fails to comply with a DOL order, then either DOL or the employee may bring suit in court to enforce it.
The TCA also includes anti-retaliation provisions that prohibit employers from taking adverse action against employees for:
- Filing, applying for, or receiving benefits under the TTCA.
- Inquiring about rights and responsibilities under the TTCA.
- Communicating intention to file a claim, complaint or appeal under the TTCA.
- Assisting in a proceeding under the TTCA, including providing or intending to provide testimony.
TTCA will have a major impact on Maryland employers. We will be watching as DOL develops implementing regulations and announces its decisions on payroll contribution rates and other questions.