Employers must start withholding premium contributions from employees for the paid family and medical leave program beginning January 1, 2025. Employers with 15 or more employees must contribute 1% of wages and may deduct up to half of this contribution from employees’ wages. Employers with 14 or fewer employees must contribute 0.5% of wages and may deduct the entire amount from employees’ wages.
As a reminder, Maine’s PFL program provides up to 12 weeks of medical leave for one’s own serious health condition or up to 12 weeks of family leave for baby bonding, family care, safety leave, or a qualifying military exigency, not to exceed a total of 12 weeks in the same benefit year beginning May 1, 2026. See prior Benefit Beat article here.
Maine’s Department of Labor released final regulations on December 4. The final regulations and other information can be found on the Department of Labor’s website. Following is a brief summary of the regulations.
Covered employee: A covered employee is one who has earned wages paid in the State and has earned at least 6 times the state average weekly wage during the first 4 of the last 5 completed calendar quarters.
Premiums: An employer's premium amount and contribution report must be remitted quarterly on or before the last day of the month following the close of the quarter for which premiums have accrued. Contributions and wage reports for the January to March 2025 quarter will be due after the end of the quarter and no later than April 30, 2025.
For the purposes of determining premium liability, any employer that employed 15 or more covered employees per that employer's Federal Employer Identification Number (FEIN) on their established payroll in 20 or more calendar workweeks in the 12-month period preceding September 30th of each year will be considered to be an employer of 15 or more employees for the calendar year thereafter. Full and part-time, temporary and intermittent employees are included.
An employer that has failed to remit premiums in whole or in part or failed to submit contribution reports on or before the last day of the month following the close of the quarter shall be assessed a penalty of 1% of the employer’s total payroll for the quarter.
Employee notice: An employee shall give at 30 days written notice of the need to use leave. If the need to use leave is unforeseeable, an employee shall make a good faith effort to provide written notice to the employer as soon as is feasible under the circumstances.
Notice shall include the reason for leave (family, medical), the type of leave needed (continuous, intermittent), and duration of leave.
Job protection: An employee that has been employed with their employer for at least 120 consecutive calendar days is entitled, upon return from leave, to be restored to the same or equivalent position with equivalent employment benefits, pay and other terms and conditions of employment.
Private plan: Employers can apply for a private plan after April 1, 2025. The private plan must be substantially equivalent to the state plan. Employers must still remit their payroll contributions until the private plan is approved by the state. An approved private plan will remain valid for three years.
To be approved, the private plan must be either a self-funded plan that requires a surety bond paid to the state, or a fully funded plan purchased from an insurance company. An internal paid leave policy alone will not satisfy the legal requirements.
The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. 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.