MAINE DOL UPDATE August 28, 2024
Maine’s Paid Family and Medical Leave (PFML) Act, signed into law by Governor Mills in July 2023, marks a substantial shift in employment policy that will affect virtually all Maine employers. The law introduces a paid leave program that will begin collecting contributions from employers and employees starting January 1, 2025, with benefits available to eligible employees beginning May 1, 2026. Here’s what employers need to know to prepare for these changes.
Key Components of the PFML Act
- Eligibility and Coverage:
- Employers: All employers with at least one employee in Maine are subject to the law. Employers with fewer than 15 employees are not required to contribute to the program, although they must collect and remit the employee’s share.
- Employees: The program covers various types of leave, including personal health conditions, bonding with a new child, and caring for a family member with a serious health condition.
- Funding:
- The program is funded through a payroll tax of up to 1% of wages, divided evenly between employers and employees. Employers may opt to cover both the employer and employee portions.
- Employers with fewer than 15 employees are exempt from paying the employer portion, but must still withhold the employee’s contribution.
- Contributions start on January 1, 2025, with a rate that may be adjusted annually based on program expenditures.
- Benefits:
- Employees are entitled to up to 12 weeks of paid leave in a 12-month period.
- The leave can be taken incrementally, in periods as short as 8 hours.
- Employer Responsibilities:
- Employers must inform employees about their rights under the PFML Act within 30 days of employment and must post a notice about the program in the workplace.
- Employers have the option to use a private plan that provides equivalent or greater benefits, subject to state approval.
- Legal and Operational Considerations:
- Employers need to ensure their current leave policies are aligned with the new law, particularly regarding the integration of PFML with existing state and federal FMLA leave.
- Retaliation against employees who take leave under the PFML Act is prohibited, and employers must reinstate employees to the same or an equivalent position upon return from leave.
- Consult an employment law attorney to ensure compliance.
What Remains Unclear About the PFMLA
As the program’s implementation date approaches, some aspects still require further clarification, including: detailed guidance on the program’s administration; and how the PFML will overlap with existing state and federal leave laws. Refer to Maine DOL for updates, expected in the months leading up to 2025.
Some Frequently Asked Questions:
- When do employers need to start contributing to the PFML program? Employers must begin making payroll contributions starting January 1, 2025. Employee benefits under the program will become available starting May 1, 2026.
- Are all Maine employers required to participate in the PFML program? Yes, most employers with employees in Maine are required to participate, though employers with fewer than 15 employees are only responsible for collecting and remitting the employee portion of the premiums.
- Can employers use a private insurance plan instead of the state program? Yes, employers can apply for approval to use a private plan, provided it offers benefits that are at least equivalent to those under the state .
- What are the penalties for non-compliance with the PFML Act? Employers may face penalties ranging from $50 to $150 per employee for failing to provide required notices about the PFML program or for other violations of the law.
Staying informed and proactive in planning for these changes will be crucial for Maine employers as they prepare for 2025 and beyond.
For more detailed guidance and to sign up to receive updates, visit: https://www.maine.gov/labor/pfml/
Register for our upcoming webinar on this topic: Preparing for Maine’s Paid Family and Medical Leave Act: What Every Business Needs to Know, October 1st, 2024, 12:00-1:00