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30 Nov

November 2020 Maine HR Legal Updates

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REMINDER: Upcoming Maine Earned Paid Leave Effective January 1, 2021

What happened?
The Maine Department of Labor (DOL) has issued the final rules for the mandatory paid leave created when Governor Mills signed the Act Authorizing Earned Employee Leave in May 2019.

What are the details?
Private employers with more than 10 employees working in Maine in the usual and regular course of business for more than 120 days in the calendar year. A covered employee can include full-time, part-time, and per-diem employees. Domestic workers making over $1,000 a year will also qualify for this paid leave.

The law will not cover seasonal employees, independent contractors, and employees working fewer than 120 days in any calendar year. Employees covered by a collective bargaining agreement during the period between January 1, 2021 and the expiration date of the agreement are excluded.

Employees will begin accruing paid leave upon hire. They will not be able to use the paid leave until 120 days after their employment date. Employers may frontload the 40 hours required at the beginning of the plan year or on the employee’s anniversary date as long as the employee receives no less earned paid leave than he or she would have earned under an accrual method. If an employer frontloads hours to an employee’s balance and the employee quits, the employer may deduct the number of hours they would not have earned on an accrual plan from the employee’s balance. Otherwise the employees will accrue at a rate of one hour of paid leave for every 40 hours worked, up to a maximum of 40 hours a year. Employees may carryover their balance from one year to the next, but employers may cap this amount to 40 hours. Employers only need to pay out existing balances of paid leave if the company has a policy setting a precedent of doing that for other accrued leaves. If not, the company can choose not to. If an employee is no longer employed with an employer who does not cash out their balance and returns to work for that employer within one year, the employer must reinstate their previous balance.

Paid leave will be paid at the employee’s base pay rate. Calculating the base rate of pay requires dividing total earnings for the week prior to the leave by the number of hours worked. Note that this has the potential for employees to take leave at an increased rate should they receive a bonus or commission in the week prior to their leave. Employees working in the service industry that typically receives tips will have the state’s minimum wage be considered their base pay rate.

Employers may require employees to provide up to four weeks’ notice of their intent to utilize their earned paid leave. In emergency situations, employees must give notice in a “reasonable” amount of time. Employees may use paid leave in increments as small as one hour. Employers may allow smaller units of time if they wish. In instances of leave being used for more than three days for sick time, employers may require a doctor’s note or other documentation.

The required workplace poster can be found here.

The Act’s full text can be found here.

An FAQ provided by Maine’s DOL can be found here.

What do employers need to do?
Maine employers should begin adjusting their workplace policies to accommodate the new leave requirement. Training should be prepared for administrative staff and management to know how to handle and administer this paid leave.