On December 4, 2024, the Maine Department of Labor (DOL) adopted finalized rules for the state’s Paid Family and Medical Leave (PFML) Program. These rules establish the framework for the program, which is set to provide up to 12 weeks of paid leave annually for eligible employees starting May 1, 2026. Below is a summary of the finalized rules.
Key Features of the Finalized PFML Rules
Covered Employees. The program covers most employees in Maine, including part-time, seasonal, and temporary workers.
Effective Dates. Employers must have begun payroll deductions for PFML contributions on January 1, 2025. Employees can start accessing PFML benefits beginning May 1, 2026.
Leave Duration and Reason for Leave. Eligible employees to take up to 12 weeks of paid leave per year for various reasons. These include bonding with a new child, caring for a sick family member, addressing serious health conditions, military family leave, safe leave for sexual assault victims, and other family and medical leave reasons such as the birth of a child, adoption, or organ donation. The definition of “family member” is broad and includes individuals with significant personal bonds, such as close friends or partners.
Use of Leave. Leave may be taken continuously, intermittently, or in the form of a reduced work schedule.
PFML Program Funding. The program will be funded via a 1% payroll tax split between employers and employees. Employers with less than 15 employees do not pay a payroll tax.
Job Protection. So long as a covered employee has been employed for at least 120 days before taking leave, the employer must restore that employee to the same or equivalent position with the same or equivalent benefits, pay, and other conditions of employment.
Benefit Amount. Maine’s Paid Family and Medical Leave (PFML) program uses a two-tiered benefit system based on the State Average Weekly Wage (SAWW), currently $1,144.67 and updated each July 1st. Lower wage earners receive near full income replacement while higher wage earners receive a reduced percentage based on annual earnings. Here’s how it works:
- Tier 1: Earnings up to 50% of the SAWW are replaced at a 90% rate.
- Tier 2: Earnings above 50% of the SAWW are replaced at a 66% rate.
Importantly, the maximum weekly benefit is capped at the SAWW itself ($1,144.67 as of July 1, 2024).
Claims Submission. Employees will apply for benefits from the state. When a leave claim is filed, the state will:
- Notify the employer within five (5) business days.
- Within 10 business days thereafter, the employer must submit any information to support a claim for undue hardship. The state will render a determination within 10 business days after receipt of the information from the employer.
- Applicants denied leave can appeal within 15 business days of the decision.
Concurrence with FMLA. If an employee takes FMLA or other equivalent leave that does not run concurrently with Maine PFML, those weeks will be deducted from the 12 weeks available under Maine PFML. Essentially, employees cannot stack 12 weeks of FMLA on top of 12 weeks of Maine PFML for 24 weeks of leave. They will only receive 12 weeks of leave.
- Concurrence with Other Paid Time Off or Wages. Maine’s Paid Family and Medical Leave (PFML) benefits are not subject to reduction under the following circumstances:
- Concurrent Employment: Benefits will not be offset by wages earned from any employer from whom the individual is not currently on leave. Therefore, individuals may receive full PFML benefits while simultaneously engaged in employment elsewhere.
- Short-Term Disability Benefits: The simultaneous receipt of employer-provided short-term disability benefits will not diminish PFML benefits, provided the aggregate payments do not exceed the individual’s average weekly wage.
In essence, income received from alternative sources during a PFML leave period will not negatively impact benefit payments, up to the limit of the individual’s typical weekly earnings.
Private Plan Option. Applications for private plan exemptions will not be accepted until April 1, 2025. Consequently, both employers and employees are required to contribute to the state PFML program for at least one quarter, irrespective of future private plan adoption.
Upon approval of a private plan, employers are mandated to refund employee contributions withheld prior to the approval date. This refund must be issued within 30 days of the substitution approval. Failure to comply with the refund requirement may result in the revocation of the approved private plan substitution. Additionally, self-insured plans must provide a surety bond to the state.
Notice Requirements. Under the PFML program, employers are obligated to:
- Workplace Posting: Display a conspicuous notice in the workplace detailing available PFML benefits. A poster for this purpose is provided by the Maine Department of Labor (DOL) and accessible via their website.
- Individual Employee Notification: Provide written notification to each employee within 30 days of their employment commencement. This notification must encompass an explanation of PFML benefits, employee rights, and associated obligations.
- Contribution Change Notice: Furnish a 14-day advance written notice to employees regarding any modifications to their PFML contribution amounts.
Next Steps for Employers
To ensure compliance with these changes, employers should:
- Update Payroll System. Employers should ensure that they have configured their payroll systems to begin withholding the employee share (0.5%) and, if applicable, the employer share 1% of the payroll tax.
- Review and Prepare to Update Leave Policies and Procedures. Employers should begin reviewing their leave policies to prepare to comply with the impending new law including aligning internal policies with PFML requirements, including job protection and leave integration updates.
- Training. Educate managers, HR personnel, and employees about their rights and responsibilities under the PFML program.
HR Works will continue to monitor this topic and provide updated information as it becomes available.
How HR Works Can Help
Managing employee leaves of absence is overwhelming, and the various laws can be difficult to navigate, especially when leave is not your primary focus. The experts at HR Works can manage the complexities of compliance when it comes to federal and state leave laws and more. To learn more about these services and how to leverage our compliance expertise and support, please contact us at info@hrworks-inc.com or call 1-877-219-9062.
