Maine law requires paid family and medical leave 

September 11, 2023

Maine is the second state in 2023 to adopt a paid family and medical leave (PFML) program (2023 Ch. 412, LD 258; see Subch. 6-C of Ch. 7 in act). Contributions are initially set at 1.0% of wages up to the Social Security taxable wage base and are evenly split between employers and employees, with an exception for certain small employers. Contributions will start in 2025; benefits will become available in 2026. Covered individuals may take up to 12 weeks of combined leave for medical and family reasons in a benefit year. Covered employers can participate in the state program or maintain an approved private plan.

The PFML law applies to all employers (including state and local governmental employers) with at least one employee working in the state. A tribal government may opt into the program. Self-employed individuals may elect to participate.

Contributions begin Jan. 1, 2025, and are initially capped at 1.0% of wages up to the Social Security maximum taxable wage base (currently, $160,200). Employers can charge employees 50% of the premium. Starting in 2028, the Maine Department of Labor (MDOL) will annually adjust the premium rate by Oct. 1 for the following year. Employers with fewer than 15 employees do not have to contribute, but their employees still must pay 50% of the premium. Employer size appears to reflect only the number of employees within the state, but confirmation from regulators would be welcome.

Wages include salary, wages, tips, commissions and other compensation specified by MDOL in future guidance. Employers will make quarterly contribution reports and premium payments. Late reports will result in penalties; see the Enforcement section below.

The law provides for medical leave and family leave. Employees can take medical leave when a serious health condition leaves them unable to work. A serious health condition includes illness, injury, impairment, pregnancy, recovery from childbirth, or any physical, mental or psychological condition involving inpatient care or continuing treatment by a healthcare provider.

Qualifying family leave reasons include:

• Bonding: to bond with a child in the first 12 months after birth or placement for adoption or foster care
• Family care: to care for a family member with a serious health condition
• Qualifying exigency: to handle matters related to a covered family member’s active-duty military service or notice of an impending call or order to active duty (with the US armed forces, National Guard or reserves), as further defined in federal Family and Medical Leave Act (FMLA) and its regulations
• Care for a covered service member: to care for a family member who is a current or former service member undergoing medical treatment, recuperation, or therapy or experiencing a temporary disability due to a serious injury or illness incurred in the line of duty or aggravated by that service
• Safety: to engage in various activities (like seeking a protection order, obtaining medical care or mental health counseling, and pursuing legal assistance) to protect an employee or a family member from violence, assault, stalking, or any other act resulting in a protective order
• Organ donation: to donate an organ for human transplant
• Military bereavement: to take time off related to a spouse’s or domestic partner’s, parent’s, sibling’s, or child’s death or serious health condition incurred while on active duty with the state military, US armed forces, National Guard or reserves

Family member. A family member is defined as any of the following individuals related to a covered employee, spouse or domestic partner:

• Biological, step-, adopted or foster children; children under legal guardianship; and individuals, regardless of age, with whom an in loco parentis relationship exists
• Biological, adoptive, foster or step-parents or legal guardians; individuals who acted as a de facto parent or stood in loco parentis during childhood
• Employee’s spouse or domestic partner (defined by statute as two unmarried adults who are domiciled together under long-term arrangements showing a commitment to remain responsible indefinitely for each other's welfare)
• Biological, adoptive, de facto, foster, or step- grandparents, grandchildren, or siblings
• Any individual — designated by the employee — who has a significant personal bond that is or is like a family relationship, regardless of any biological or legal relationship

Even though Maine has a domestic partnership registration process, an employee’s unregistered domestic partner is considered a family member for purposes of this law. For more details on domestic partnership issues, see Domestic partner benefits remain popular but present challenges (July 11, 2023).

Eligible employees may take up to 12 weeks of medical and/or family leave in a benefit year. A benefit year is the 12-month period starting on the first day of the calendar week immediately before the date leave benefits start. Bonding leave generally must end within 12 months of the child’s birth or placement. Employees must schedule leave to prevent what the employer reasonably considers undue hardship to work operations.

An employee may take intermittent leave for all qualifying reasons in increments of at least eight hours or another reduced schedule to which the employer and employee mutually agree. Benefits are proportionally prorated.

An employee may take medical leave related to pregnancy or childbirth recovery immediately before taking family leave, as long as documentation from a healthcare provider supports the medical leave. Whether this situation is an exception to the 12-week combined limit is unclear.

Benefits will become available on May 1, 2026. The law does not set a minimum benefit; the maximum weekly benefit equals the state average weekly wage (SAWW). Currently set at $1,103.71, the SAWW is updated effective every July 1 by the state Workers’ Compensation Board. In addition, MDOL can adjust the maximum weekly benefit, following recommendations from the PFML Benefits Authority.

Eligible employees. All employees can receive benefits if they have a qualifying reason and had at least six times the SAWW in earnings subject to PFML premiums in the base period. The base period is the first four quarters immediately before the first day of the benefit year. Using current numbers, an eligible employee would need $6,622.26 in wages subject to PFML premiums in the base period. MDOL or an authorized third-party administrator will determine benefit eligibility once an employee files a completed application. For a discussion of the application process, see the Administration section below.

Benefit calculation. The weekly benefit amount depends on a covered individual’s average weekly wage (EAWW) relative to the SAWW. The EAWW reflects wages in the employer’s contribution reports.

• If the EAWW is less than or equal to 50% of the SAWW, the weekly benefit is 90% of the EAWW.
• If the EAWW is more than 50% of the SAWW, the weekly benefit is 90% of one-half of the SAWW, plus 66% of the EAWW exceeding one-half of the SAWW, up to the benefit maximum (100% of the SAWW).

Example. MNO Co. has three employees eligible for PFML benefits: Audrey, Bob and Chris. Average weekly wages are $500 for Audrey, $1,000 for Bob and $2,000 for Chris. Using the current SAWW of $1,103.71 for illustrative purposes only (the SAWW for the initial 2026 benefit year will be different), here are the weekly PFML benefit amounts:

• Audrey: $500 x 0.90 = $450
• Bob: [$551.86 x 0.90] + [($1,000 - $551.86) x 0.66] = $496.67 + $295.77 = $792.44
• Chris: $496.67 + [($2,000 - $551.86) x 0.66] = $496.67 + $955.77 = $1,452.44, reduced to $1,103.71 (100% of the SAWW)

Proration. Benefits are prorated for intermittent or reduced-schedule leave.

Timing. Benefits are not paid during the first seven days of medical leave; no waiting period applies for other qualifying reasons. Benefit payments occur weekly.

Benefit reductions. PFML benefits are reduced by benefits received under workers’ compensation, unemployment compensation, or any other government program or law. Benefits are also reduced by permanent disability benefits received under an employer-sponsored policy or program.

Taxation. Whether benefits are subject to state income tax is currently an open issue. MDOL, in consultation with the Department of Administrative and Financial Services and the Bureau of Revenue Services, will adopt rules related to state and federal taxation, with the latter based on any IRS determination.

During an employee’s leave, employers must maintain all employment-related health insurance benefits for covered individuals and dependents under the same conditions that applied before the leave. In addition, taking leave may not interfere with an employee’s right to other employment benefits, plans, or programs, including group life, disability, sick leave, annual or vacation leave, educational benefits, and pensions. Employees with at least 120 days of service are entitled to an equivalent position with equivalent benefits, pay, and other employment terms and conditions on return from leave. Job protection does not extend to employees with shorter tenure.

The use of paid leave “may not affect an employee's right to accrue vacation time, sick time, bonuses, advancement, seniority, length of service credit or other employment benefits, plans or programs.” Whether this protection entitles employees to continue accruing these benefits during leave is unclear.

The law protects employees from employer discrimination, retaliation and interference with any PFML right. Penalties apply for violations; see the Enforcement section below.

With MDOL approval, employers may substitute a private plan substantially equivalent to the state program. Employers and employees with approved private plans do not contribute to the state PFML Insurance Fund. An employer cannot require employees to pay more for a private plan than they would otherwise pay for the state program.

Private plans may be self-funded or insured. Self-funded plans must obtain a surety bond, and insured plans must have a policy issued by an insurer authorized to do business in Maine. MDOL hears all private plan appeals of contested determinations and denials. The agency will annually determine its related administrative costs that private plans must reimburse.

MDOL may withdraw private plan approval for failures to:

• Pay benefits on a timely basis or at all
• Maintain an adequate surety bond
• Submit reports
• Otherwise comply with the law and related rules

In addition, MDOL may withdrawal approval for misuse of private plan funds. Penalties apply to noncompliant private plans; see the Enforcement section below.

Employers cannot condition the right to PFML benefits on an employee’s use or exhaustion of accumulated vacation, sick pay, or any other paid time off (PTO) prior to or during the PFML. Employees may use accrued sick pay, vacation or other paid leave during the first seven days of medical leave; however, an employer may not compel employees to exhaust sick, vacation or PTO before taking PFML.

The law does not address whether employers can designate salary continuation, vacation, sick leave or other PTO to top off PFML benefits so income replacement equals 100% of the EAWW. The law also does not address how employer-provided benefits (like short-term disability) coordinate with PFML.

Employers can require PFML to run concurrently with leave taken for qualifying reasons under the federal FMLA and the state’s unpaid family medical leave law.

Employer notice. Employers have two major notice requirements:

• Post in a conspicuous place at each workplace a notice explaining available benefits in English and each language that is primary for at least three employees in the workplace.
• Provide each new hire within 30 days of employment a notice describing available benefits, contributions and related information in the employee’s primary language.

MDOL will issue the workplace poster in English, Spanish, French, Somali, Portuguese and any other language that is primary for at least 2,000 Maine residents. The agency may also provide model new-hire notices. Employer notice failures are subject to penalties; see the Enforcement section below.

Employee notice. Employers may require reasonable notice of an employee’s need for leave, except in case of an emergency, illness or other sudden necessity for leave. Employers failing to comply with the employer notice requirements noted above waive the right to this employee notice.

MDOL will administer the program but may conduct a competitive bidding process to engage a third party to handle claims administration. The governor-appointed PFML Benefits Authority, a 15-member board, is responsible for monitoring the program’s solvency and making recommendations.

Covered individuals can apply for benefits as early as 60 days before (and no more than 90 days after) the leave starts. MDOL or its third-party claims administrator will establish forms and procedures, including required supporting documentation. The 90-day filing deadline may be waived for good cause. The claims administrator must notify the employer within five business days of the claim filing. An employee willfully making a false statement, misrepresenting a material fact or withholding material facts loses eligibility for benefits.

MDOL will establish a system for the state program and private plans to consider appeals of denied or contested claims. Judicial review is permitted after administrative remedies are exhausted.

MDOL can take enforcement action against employers that violate the job-protection and anti-retaliation provisions of the law.

Statutory penalties. Employer notice failures are subject to a penalties of $50 per employee for the first violation and $150 per employee for subsequent violations. Employer contribution failures trigger an assessment of 1.0% of annual payroll for each noncompliant year, in addition to premiums already owed. MDOL may annually adjust the 1.0% rate. Noncompliant private plans are subject to a penalty of $100 per violation. All penalties are transferred to the state PFML Insurance Fund.

Maine joins Minnesota (which also has a new 2023 PFML law) and 12 other states (plus Washington, DC, and Puerto Rico) that require paid leave for an employee’s own serious health condition or disability. Except for Hawaii and Puerto Rico, all of these jurisdictions also require paid leave for qualifying family or caregiving reasons. For more information, see 2023 state paid family and medical leave contributions and benefits (Feb. 1, 2023).

Employers should consider taking these steps before contributions start in 2025:

• Factor the law’s requirements into future workforce planning.
• Compare existing PTO and other paid leave programs with the Maine requirements, and address coordination of benefits.
• Assess whether a private plan (fully insured or self-funded) is preferable to the state program.
• Review payroll system to ensure proper salary-reduction contributions, quarterly wage reporting and electronic premium payments.
• Educate staff members on the law’s requirements, and create a communication strategy for the required notices.
• Look for upcoming MDOL guidance, sample notices/documents and other developments, particularly on topics — like program administration and benefits coordination — not addressed in the law.

• 2023 Ch. 412, LD 258 (see Subch. 6-C of Ch. 7 in act) (ME Legislature, July 11, 2023)
• Paid family and medical leave in the United States (Congressional Research Service, Feb. 28, 2023)
• Family and Medical Leave Act (29 USC §§ 2601–2654)
• Family and Medical Leave Act regulations (29 CFR §§ 825.100–825.803)

• Domestic partner benefits remain popular but present challenges (July 11, 2023)
• Minnesota passes paid family and medical leave law (July 10, 2023)
• 2023 state paid family and medical leave contributions and benefits (Feb. 1, 2023)

• Life, absence and disability benefits
• Employers revisit time-off benefits (June 3, 2021)
• Think globally, comply locally: How employers navigate leave laws (Nov. 15, 2018)