By Eric J. Uhl / September 17, 2020

Last year, we wrote about Maine’s new mandatory paid leave law that takes effect on January 1, 2021, here. In summary, under the new law, covered employers that employ 10 or more employees, including full-time and part-time employees, for more than 120 days in a calendar year must provide the employees with one hour of paid leave for every 40 hours that the employees work, up to a maximum of 40 hours of paid leave annually. The Maine Department of Labor recently issued its long-awaited regulations interpreting, and answering some of the questions regarding, the new law.  You can see the new regulations here. The DOL also issued a set of FAQs regarding the law, which you can see here.

Here are some key take-aways under the DOL’s new rule:

  • Base rate of pay. Employees are entitled to paid leave at their base rate of pay immediately prior to the leave. The new rule defines base rate of pay as the employee’s rate of pay used for purposes of determining overtime (typically called the “regular rate”), as defined in 26 M.R.S.A. § 664(3).
  • 120 day period. Employers are covered if they employ more than 10 part-time or full-time employees in a 120-day period. Although eligible employees are entitled to start accruing paid leave time immediately upon hire, a covered employer does not have to permit access to the paid leave time until the employee has been employed for 120 days. The new rule specifies that in both cases, the 120-day period refers to calendar days, not business days.
  • Seasonal industries. An employee’s employment is excluded if the employee works in a seasonal industry, which means those industries determined by the Unemployment Insurance Commission to be seasonal industries, and when the employer has submitted the report of the seasonal period for the applicable year, as provided by the unemployment law, 26 M.R.S.A. §1251, and the applicable unemployment regulations.
  • Applicable one year period. The law provides for paid leave up to a total of 40 hours in a one-year period. The new rule specifies that a one-year period means 365 consecutive days (366 for leap years) beginning with an employee’s first day of work, or such other period that an employer may assign, provided that an employee does not lose any earned paid leave measured from the start of employment.
  • Carry-over of unused leave. Employees with accrued but unused hours of earned paid leave from one year are entitled to carry over those hours into the next year, but only up to a maximum of 40 hours in an applicable year.
  • Payment upon separation. If a covered employer’s established practice provides for payment of accrued, unused paid leave time upon separation of employment, the employer also must provide for payment of accrued, unused earned paid leave under the mandatory paid leave law.
  • Notice. Absent an emergency, a covered employer may require up to 4 weeks’ notice of an employee’s intent to use earned paid leave.
  • One hour increments. Eligible employees may use earned paid leave in increments of at least one hour, unless the employer allows smaller increments.
  • Limit on requiring use of paid leave. Employers may not require an employee to use earned paid leave when the employer causes the employee to be unable to perform work, such as when closing the business or cancelling a shift.

Finally, the FAQs clarify that an employer may use its existing paid leave policy to comply with the law—so long as it provides all of the benefits and conditions required by the new mandatory leave law.

As we noted earlier, you probably will need to revise or update your paid leave policies to comply with this new law as interpreted by the new rule. Please contact us if you need assistance in making sure you are in compliance with this new paid leave law.

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