Time to Update Your Leave Policies! Maine’s New Paid Leave Law Becomes Effective January 1, 2021

Many of us are eager to leave 2020 behind, and it’s time to start preparing your employee handbook for the change.  On the first of the new year, private Maine employers with more than 10 employees will be required to provide 1 hour of paid leave for every 40 hours worked, up to a maximum of 40 hours of paid leave per year.  An employee can take leave under this new law for any reason.

Luckily, the Maine Department of Labor (MDOL) has issued some helpful guidance in the wake of this change.  There is also a mandatory poster, which you can print out HERE.  For now, here are some of the key points of the law:

Who is Eligible for the Paid Leave?

  • An employee is eligible for leave if they have worked for more than 120 days in any calendar year prior to requesting the leave.
  • A covered employee may be full-time, part-time, or per diem.
  • Domestic workers, even those working in private homes, earning more than $1,000 per year are eligible for leave.

What is the Rate of Pay?

  • Employers must pay employees their regular base rate of pay, including bonuses and commissions. Calculating the base rate of pay requires dividing total earnings for the week prior to the leave by the number of hours worked. This means that an employee could theoretically take leave at an increased rate should they receive a bonus or commission in the week prior to their leave.
  • Employees who use tip credit will use Maine’s minimum wage as the base rate of pay.

How Can the Leave be Used?

  • Employees can use this leave for any purpose. It does not apply to just sick time.   Employers, however can request and require up to four weeks’ notice of an employee’s intent to use the leave (absent an emergency circumstance).
  • Employees may use earned paid leave in increments of at least one hour, unless the employer chooses to allow smaller increments.
  • Employees may roll over any unused leave, but employers can cap the total number of hours at 40 per year. This means that, even if an employee rolls leave over from one year to the next, they can still can only take a total of 40 hours under this law.

Perhaps the most important component of this law is that employers are only required to provide 40 hours of leave total to employees.  This means that if your workplace already provides paid leave of 40 (or more) hours, this law does not require you to go above and beyond that threshold.  If, however, your existing policy only provides for 20 hours of sick time and 20 hours of vacation time per year, that would not not meet the requirements of the Earned Paid Leave law, because, according to the MDOL, the employee must be allowed to use up to 40 hours of accrued Earned Paid Leave for either sick or vacation, or a combination thereof.

The MDOL has taken a stab at generating some FAQs, offering some helpful guidance on industry-specific issues.  As the new year approaches, you may want to take a look at your leave policies, employment handbook and other benefits, to ensure that the transition to 2021 is a smooth one.\

This article is not legal advice but should be considered as general guidance in the area of employment and corporate law. Amy DieterichJordan Payne Hay, and James  F. Pross are employment and labor law attorneys; others at the firm handle business and other matters. Since 1853, Skelton Taintor & Abbott has provided a full range of high-quality legal services to the individuals, companies, and municipalities of Maine. The firm’s main office is located in Auburn and in January 2019, a mid-coast office was opened in Waldoboro.