Maine’s Earned Paid Leave Law is Effective January 1, 2021: Are You Ready?

December 11, 2020

 

Maine Earned Paid Leave

A year and a half has passed since Maine’s Governor Janet Mills signed L.D. 369, An Act Authorizing Earned Employee Leave, into law. The Maine Department of Labor (MDOL) issued its final rules on the ground-breaking earned paid leave legislation on September 14, 2020, and Maine’s Earned Paid Leave Law officially goes into effect January 1, 2021.

This is a law unlike any other. Sure, like the laws in most other states, it can be used for emergencies, illnesses, and doctor’s appointments. But, unlike other state laws, Maine’s Earned Paid Leave can be used, theoretically, just because. The extent and notice requirements vary based on specific policies you’re allowed to establish as an employer, but, hypothetically, your employee could take leave for a disruption in childcare due to weather, to be home for a scheduled delivery of some kind, and possibly just for a figurative “mental health day.”

Who does Maine’s Earned Paid Leave Law affect?

Employers across all industries, unless deemed as a seasonal industry by the Maine DOL, and as defined by Maine law, employing more than 10 employees in Maine for more than 120 days in any calendar year are subject to Maine’s Earned Paid Leave law. In counting toward the 10-employee threshold, an employee should generally be included if he or she is covered for unemployment insurance purposes. Luckily, municipalities in Maine aren’t allowed to create their own separate or subset of rules, so employers with multiple business locations and employees in different parts of the state are still only bound to a single set of rules.

Employees are eligible, whether they are full-time, part-time, temporary, or per diem. Seasonal employees, independent contractors, employees working fewer than 120 days in the calendar year, and employees covered by collective bargaining agreements (CBAs) as of January 1st are excluded. The CBA exclusion, however, dissolves when the CBA expires, and new CBAs – agreed to after January 1st – will have to include earned paid leave benefits.

How does Maine’s Earned Paid Leave Law work?

Under the law, your employees will accrue 1 hour of earned paid leave for every 40 hours worked, which, in a defined year, can be up to 40 hours. From one year to the next, your employees are allowed a carryover of up to 40 hours. The employee’s base rate of pay for earned paid leave must be calculated using the employee’s regular pay rate, including bonuses and commissions, and must be based on the week immediately prior to the leave taken. This undoubtedly means some employees may purposefully plan leave for the week following their receipt of a large commission or a bonus.

You cannot require an employee to use accrued earned paid leave for circumstances solely in your control as the employer, such as closing your business or canceling an employee’s shift. And, unless the employee’s leave spans a period longer than 3 consecutive days, you may not require the employee to obtain and remit a medical note or similar documentation.

If your established policy is to pay any balance of unused leave at the time of an employee’s separation, that policy will also apply to earned paid leave. Also, should earned paid leave not be paid out at the time of separation, and should an employee return to work for you within one year of their date of separation, the employee is entitled to any unused balance of earned paid leave.

How should employers and HR personnel prepare?

The MDOL also released an updated Regulation of Employment Poster in October 2020, which includes information on the new law. All employers should ensure the latest version of this poster is prominently displayed in the workplace.

A number of standards under this law are left in part or in full to your discretion as the employer, so you need to establish and document policies and procedures related to those variables and ensure you have the appropriate time-tracking system in place, so management and HR are trained and ready ahead of January 1st.

Under the law, you are allowed to offer a benefit of like-kind that exceeds the standard of leave Maine is requiring. You may also determine whether earned paid leave should be frontloaded at the beginning of the year. If you do allow your employees to use earned paid leave before it is accrued, you are permitted to withhold any amount not yet accrued by an employee from their last paycheck.

While employees begin accruing immediately upon hire, you may, at your discretion, apply a 120-day waiting period for use of accrued earned paid leave. You may require your employees to give advance notice of up to 4 weeks when they are requesting use of earned paid leave, unless it is for an emergency, illness, or sudden necessity (for these reasons, the law indicates that employees are required to you “as soon as practicable”).

The law states that employees may use earned paid leave in increments of at least one hour; however, you may opt to allow your employees to use smaller increments. For scheduling purposes, assuming the request is not on account of an emergency or illness, you are allowed to set “reasonable limits” to prevent undue hardship, such as those leading to significant operational effects or increases in expenses.

It’s imperative to have a firm grip on these variables heading into 2021. Employers who violate Maine’s Earned Paid Leave Law will be subject to penalties of up to $1,000 per violation, so a solid understanding and compliance with the law are critical. Take a look at the MDOL’s FAQ on Earned Paid Leave, become familiar with the law itself, Maine Statute – Title 26, Chapter 7, Subchapter 2, §637, Earned Paid Leave, and take advantage of professional advisory services.

Contact Commonwealth Payroll & HR

As you prepare for Maine’s Earned Paid Leave Law, let the professionals at Commonwealth answer your questions; provide you with best practices; help with management and HR personnel training; assist with policy, handbook, and other documented updates; and implement the appropriate time-tracking procedures and software.

We tailor our services specifically to your needs, and we are committed to keeping clients up-to-date and compliant as this law becomes effective, and moving forward. Contact us today to discuss your strategy.

 

*The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information. This article contains links to other third-party websites provided only for the convenience of the reader.

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