FAMLI Program: Creating More Harm Than Good

The good intentions of Family and Medical Leave Insurance (FAMLI) Program, HB 341, may be overshadowed by the long-term negative impact it would have not just on the construction industry, but also the small business community and Maryland’s economic bottom line. 

The legislation would provide up to 12 weeks of benefits to an employee who is taking partially paid or unpaid leave from employment due to caring for specified family members, the employee’s own serious health condition, or a qualifying exigency arising out of a family member’s military deployment.

  • Employers who employ at least one employee must participate in the program. A “covered employee” is an employee who has worked at least 680 hours over a 12-month period
  • The bill establishes the FAMLI Fund, which is a special, non-lapsing fund administered by the Secretary of Labor, Licensing, and Regulation
  • The fund consists of employee and employer contributions, money paid to the fund for reimbursing the Secretary for erroneously paid benefits, interest earned in the fund, and money from any other source
  • Beginning on January 1, 2020, each employee and employer must pay to the Secretary of Labor, Licensing, and Regulation contributions on wages, which are established in regulation

Associated Builders and Contractors has the following main concerns:

  • The way in which the legislation and its minimum standards were set;
  • The government implementation of program;
  • The bill requires an employer contribution but does not indicate how much it will be or how it will be determined;
  • How 12 weeks of leave would impact individuals in our apprenticeship program which requires classroom attendance;
  • How this legislation will impact the calculation of Davis-Bacon and future wage determinations; and
  • The competitive disadvantage that it creates for our companies in this regional environment.

To correct the harms HB 341 would create for the construction industry and small business community, ABC proposes the following before the law takes effect on June 1, 2019:

  1. The ability for all construction-based companies to opt out of the program, including the tax, provided that they meet the mandatory minimums set forth in federal and Maryland law;
  • An amendment to the Maryland’s first source law to include a waiver for companies impacted by this legislation;
  • An amendment to the Maryland’s apprenticeship standards for companies impacted by this legislation;
  • An exemption for construction companies working on federal projects;
  • An exemption for construction companies working on state projects that receive any federal funding;
  • Uniformity of benefits for covered and non-covered employers;
  • Language mandating the design and completion of a technology management system for the program prior to any funds being collected.