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

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 1 – Article 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.