Maryland labor department seeks flexibility for self‑employed under paid‑leave law

The Maryland Department of Labor asked the Economic Matters Committee on Oct. 12 to support HB102, legislation that would remove current statutory language allowing self‑employed workers to opt into the State’s paid family and medical leave program and direct the department to craft a new participation framework by regulation.

Secretary of Labor Portia Wu told the committee the bill would give the department “more time to allow for some seamless implementation” and let staff rethink how self‑employed workers could participate in the program. Wu said Maryland’s program was modeled on other states, but those states have seen very low takeup among self‑employed people.

The bill would repeal the existing statutory language on self‑employed participation and require the department to develop participation rules by regulation. Regan Vaughn, director of policy for the family division at the Maryland Department of Labor, said the department has held stakeholder sessions that included national and local partners and self‑employed individuals and has secured an actuarial contract to model policy options. Vaughn said the department “intend[s] to engage with stakeholders about exactly how that framework should look.”

Why it matters: HB102 aims to make the program workable for independent contractors and other non‑wage‑paid workers, a group the department says is ill‑served by a benefit calculations model built around regular weekly wages.

Key provisions and clarifications presented to the committee include three department amendments: one to allow the comptroller’s office to share tax information with the Department of Labor to help detect fraud; a second to let public and private plans pay benefits more frequently than the statute’s current biweekly requirement; and a third establishing an "anchor date" — defined in the department’s testimony as the earlier of the application date or the date leave begins — to fix the income period used for eligibility and benefit amounts. Vaughn said the anchor date would let the department process applications submitted well before a leave start date without holding them until leave begins.

Committee discussion and fiscal points: Committee members asked about participation estimates for self‑employed workers and whether the proposal would increase administrative cost. Vaughn and Secretary Wu said takeup has been low in other states (they cited about 1–2 percent in states with current models), that the department does not have a precise Maryland estimate yet and that the actuarial vendor will model options. Wu said the department expects the regulatory approach could simplify the system and “take a little bit of work away” rather than add cost, but the committee did not receive a formal fiscal note tied to the amendments during the hearing.

On participation rules, the department reiterated that W‑2 employees are required to participate in the State program while 1099 contractors are not mandatory participants under current law; HB102 would change how 1099/self‑employed participation is structured rather than make it mandatory. The department said it will seek an MOU with the comptroller’s office before any data sharing and is still negotiating exact amendment language with that office.

Action taken: At the close of the presentation, Secretary Portia Wu requested a favorable report on HB102 with the department’s amendments; no formal committee vote was recorded during the hearing.

Looking ahead: The department said it will return to the committee with actuarial modeling and additional draft language as stakeholder engagement continues.