On July 8, 2021, Maine Governor Janet Mills signed legislation (HP 446) lowering the percentage of pay an employer can withhold from an employee who was overpaid. Employers that overpay an employee due to employer error cannot withhold more than five percent of the net amount of any subsequent pay without the employee’s written permission. If the employee quits, the full amount of overpayment can be deducted from any wages due. The timeframe for when an overpayment due to employer error can be recovered is limited to the three years preceding the date of its discovery.
The law is effective October 18, 2021.
