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May 2022: Amended Maine Law Will Require Vacation Payout When Employment Ends

17 May


Update Applicable to:
All employers with 11 or more employees in the state of Maine.

What happened?
On April 7, 2022, Governor Mills signed H.P 160 – L.D 225 into law, which amends the state’s final wages statute to require that “all unused paid vacation accrued pursuant to the employer’s vacation policy on and after January 1, 2023, must be paid to the employee on cessation of employment.”

What are the details?
Effective July 19, 2022, private employers with 11 or more employees must pay all unused vacation to a separated employee at the cessation of employment regardless of the employer’s policy. Payment must be made in full no later than the employee’s next established payday.

Additionally, if a collective bargaining agreement (CBA) governs an employee’s employment and addresses vacation payout when employment ends, the CBA, not the statute, will determine vacation payout requirements. These new provisions also apply when a company sells its business under a separate part of the statute, treating a sale of a business the same as any other “cessation of employment.”

For more information, please see the links below:

H.P 160 – L.D 225

Article 1Article 2

What do employers need to do?
Employers should review the links provided above and payout their employees’ unused vacation time upon cessation of employment.

Need help understanding how changes to employment laws will affect your business?

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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