Maine: Rules Issued to Implement PTO Law
The state of Maine enacted a broad paid personal leave law in May, 2019 (see prior Benefit Beat article). The law takes effect January 1, 2021. To implement the provisions of this law, the state’s Department of Labor issued final rules on September 14, 2020. Following are highlights of clarifications made by these rules.
Employers subject to the law. The law applies to any private employer who employs more than 10 employees in the state for more than 120 days in a calendar year. Seasonal businesses are exempt from the requirements of the law. The final rules clarify that if an individual is a covered employee for unemployment insurance purposes, then that individual is included in the 10-employee count, and is covered by the earned paid leave law.
Covered employee. A covered employee is one who is engaged in employment of the employer subject to the law, and includes employees who work full-time, part-time, temporary or per diem basis.
Amount, accrual, carry over and front-load of leave. An employee is entitled to accrue one hour of earned paid leave for every 40 hours worked, up to 40 hours in a defined year. For this purpose, a “year” is defined as a period of 365 consecutive days beginning with the employee’s date of hire, or any subsequent period of 365 consecutive days beginning on either the anniversary date of the employee’s date of hire, or such date as the employer may assign, provided that no loss of earned paid leave results for any employee.
Accrual begins at the start of employment, but employers can apply a 120-day wait period before employees can use accrued earned paid leave.
Employees can use up to 40 hours of earned paid leave in a defined year, and may carry over up to 40 hours of earned paid leave from one defined year to the next. Alternatively, an employer may frontload 40 hours of earned paid leave at the beginning of the year.
An employer is not required to pay out unused earned paid leave upon separation unless that is the employer’s established policy or practice. An employee who returns to work within one-year from separation with the same employer is entitled to any unused earned paid leave that was not paid out at the time of separation of employment.
Use of leave. An eligible employee can use his/her earned paid leave for any reason. Employees may use earned paid leave in increments of at least one hour, unless the employer chooses a smaller increment.
Notice Obligations. The employer can require an employee to provide up to 4 weeks advanced notice of the need to use earned paid leave, unless it is an emergency. The employer may place reasonable limits on the scheduling of earned paid leave to prevent an undue hardship on the employer.
Employer posting requirement. Employers have an existing obligation to display a workplace posting, known as the “Regulation of Employment” poster. The Maine Department of Labor has updated the poster to include the right to earned paid leave law (available here).
Enforcement. The state’s Labor Department is charged with enforcement of this law. Violation of the law could result in monetary penalty assessments of up to $1,000 per violation. Each denial of paid leave for each affected covered employee would constitute a separate violation.
Additional Information. To assist employers in their compliance with the law, the state’s Department of Labor has established a dedicated Earned Paid Leave webpage which provides additional information, the workplace poster and FAQs.
Coordination with employer’s existing PTO policy. An employer’s existing leave policy can satisfy the obligations of this law as long its earned paid time off policy is at least as generous as the law requires. With the fast approaching effective date, employers should review their existing leave policy to make certain they are prepared.
The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.