Frequently Asked Questions (and Answers) Concerning Maine’s Paid FMLA Law

[co-author: Hannah Saturley]

As we enter the fourth quarter and await the reveal of the state’s third iteration of revisions to the proposed rules governing the state’s Paid FMLA statute, what are some things all Maine employers (and employers outside of the state with Maine employees) should know about Maine’s recently enacted paid Family and Medical Leave Act (“ME PFML”)?[i]

What Are the Basics Employers Need to Know?

1. What is the new Paid Family and Medical Leave (PFML) Program?
   1. Maine’s new PFML law was enacted in October 2023 and establishes a state benefits program funded by employer and employee contributions. The ME PFML program grants employees up to 12 weeks of paid medical and/or family leave.
2. What will my contribution rate for the PFML be?
   1. Employers with 15 or more employees will contribute 1 percent of wages and may deduct up to half of the contribution from the employees’ wages.
      Employers with less than 15 employees will contribute 0.5 percent of wages and may deduct the entire amount from the employees’ wages.
3. What employers are required to participate in the Program?
   1. The Program applies to almost all employers with one or more employees in Maine. The Federal government is exempt, as are tribal governments, as well as a handful of additional exemptions. The vast majority of employers, however, both public and private, are covered. Self-employed individuals may elect coverage.
      Employers who are not headquartered in Maine or do not have operations in the state may still be required to participate in the program as it relates to employees who work in Maine.
4. If an employer has under 15 employees, does the ME PFML apply?
   1. Yes. Although employers with fewer than 15 employees are not subject to the payment of the employer’s portion of the premium, they are still obliged to collect and pay the employee portion as well as provide the 12 weeks of leave and other benefits set forth under the law.
5. How will an employer’s size be calculated?
   1. If the employer employed 15 or more covered employees (i.e., employees collecting wages in Maine) on their payroll in 20 or more calendar workweeks during the 12-month period preceding September 30 of each year, they will be considered an employer of 15 or more employees for the following calendar year.
6. I have multiple businesses, how is “employer” determined?
   1. Each Federal Employer Identification Number (FEIN) is a unique employer for purposes of determining employee count under the statute.
7. Does this number include temporary, intermittent, and part-time employees or only FTE?
   1. An employer’s size count includes full-time, part-time, temporary and intermittent employees, along with any workers who are on paid sick leave, on paid holiday, or who work during only part of the specified pay period.
8. How are wages for purposes of determining contribution defined under the statute?
   1. Wages are calculated in the same manner as Maine unemployment wages. “Wages” means all remuneration for personal services, including tips and gratuities, severance and terminal pay, commissions, and bonuses, but does not include remuneration for services performed by an independent contractor. Wages include remuneration for services performed in the State or wages which are otherwise subject to Maine unemployment tax.
9. When will an employer be required to begin making contributions?
   1. Starting January 1, 2025.
10. What if an employer forgets to deduct the 0.5% from an employee’s pay to cover the employee portion of the contribution?
    1. Failure to deduct the amount from an employee’s pay will result in a determination that the employer has elected to pay the portion of the employee’s share. The employer may not later deduct the amount from a future paycheck in a different pay period unless there is a lack of sufficient wages to cover the employee’s share of premiums for a pay period.
11. When are employer premium payments and contribution reports due?
    1. Premium payments and contribution reports must be submitted quarterly and will be due on or before the last day of the month following the close of the quarter.
12. Where will I submit premiums and wage reports?
    1. Employers can submit premiums and wage reports through the Maine Paid Leave Portal which will be available in early 2025.
13. When do employees start receiving benefits under the PFML program?
    1. May 1, 2026.
14. Can I ask an employee to use their sick, vacation, or personal time prior to or while taking paid family or medical leave?
    1. An employee can choose to supplement their ME PFML payments with employer-provided benefits, but an employer cannot compel an employee to exhaust their leave time prior to (or while) taking ME PFML.
15. How much time can workers take?
    1. Workers can receive up to 12 weeks of leave per benefit year. Such leave can be all at once or intermittent in nature.
16. What is a benefit year?
    1. The 12-month period starting on the first day of the calendar week immediately before the date leave benefits start.
17. On what basis can an employee take leave?
    1. An employee can take ME PFML for any of the following reasons:
       1. A serious health condition of the employee;
       2. To bond with a child during the first 12 months after the child’s birth or the first 12 months after the placement of the child for adoption or foster care with the employee;
       3. To care for a family member with a serious health condition;
       4. To attend to a qualifying exigency, defined as need for leave resulting from a spouse, child, or parent of the employee being on covered active duty (or has been notified of an impending call or order to covered active duty) in the Armed Forces;
       5. To care for a family member who is a covered service member;
       6. To take safe leave;
       7. To donate an organ for a human organ transplant; and
       8. The death or serious health condition of the employee’s spouse, domestic partner, parent, sibling or child if the spouse, domestic partner, parent, sibling or child is a member of the state military forces or the United States Armed Forces and dies or incurs a serious health condition while on active duty.
18. Under the statute, who is considered a family member that employees can use leave to care for?
    1. The definition of family member is broad. A family member can include a worker’s spouse or domestic partner, child, parent (biological, adoptive, foster, step, defacto, legal guardian, person who stood in loco parentis), parent-in-law, sibling (biological, adoptive, foster, step, defacto), grandchild (biological, adoptive, foster, step, defacto), or grandparent (biological, adoptive, foster, step, defacto). Additionally, the definition also includes a person “with whom the covered individual has a significant personal bond that is or is like a family relationship, regardless of biological or legal relationship.”
19. If an employer has employees who live in another state but work in Maine, are they covered by the ME PFML?
    1. The locality of wages earned in Maine is determined using the same test under Maine unemployment law. This is determined using a four criteria sequential test. Four factors, taken in sequence, determine whether or not employment is reportable in Maine:
       1. Place where work is performed
          1. If the employee performs all work in Maine, or if the work outside Maine is incidental (temporary or minor), then Maine law applies. If this does not apply, continue to the next factor.
       2. Base of Operations
          1. If the employee performs work in Maine and other states, then if the base of operations is in Maine, Maine law applies. The base of operations is the primary location from which the employee starts work and returns regularly. If this does not apply, continue to the next factor.
       3. Place from Which Service is Directed or Controlled
          1. If the employee has no base of operations or no work is performed in the base state, but the service is directed or controlled from Maine, Maine law applies. This refers to the general place of authority rather than direct supervision. If this does not apply, continue to next factor.
       4. Place of Residence
          1. If none of the above criteria apply, and the employee performs work in Maine and other states, and resides in Maine, then Maine law applies. If none of the above apply, the employment is not reportable in Maine.
20. Are employers with over 50 employees, required to provide employees with both federal FMLA and ME PFML?
    1. Employers can require PFML to run concurrently with leave taken for qualifying reasons under the FMLA, but both laws will continue to apply to the employer. Thus, even if the employee takes leave under the ME PFML, employers still must comply with the obligations under the FMLA.
21. Are employers required to restore an employee to their prior position after the employee returns from ME PFML?
    1. If the employee has been employed for at least 120 days, employers are required to restore the employee to the same or equivalent position upon their return from ME PFML.
22. Under the statute what is a serious health condition for purposes of being eligible for medical leave under the ME PFML?
    1. Serious health conditions that qualify for the use of ME PFML include:
       1. Illness
       2. Injury
       3. Impairment
       4. Pregnancy
       5. Recovery from childbirth
       6. Physical, mental or psychological condition involving inpatient care or continuing treatment by a healthcare provider.
23. Does the ME PFML replace an employer’s obligations under other policies, collective bargaining agreements or employment agreements?
    1. No. Employers must still follow already established contracts or collective bargaining agreements. Employers can create their own policies and practices that are not otherwise in violation of the law.

Do Employers Have to Use the State Program or Can Private Plans be Substituted?

24. Can an employer use a private plan in lieu of participating in the state program?
    1. Yes, ME PFML permits employers to provide the required benefits through private plans approved by the DOL.
25. How does an employer know if a private plan is approved by the DOL?
    1. Private plans may be either self-funded or insured under a policy issued by a state-authorized insurer. The statute requires private plans to replicate the terms of the State Program at a cost to employees not greater than authorized for the Program. The maximum number of weeks of leave, wage replacement rate, and maximum weekly benefit must be “substantially equivalent” to those provided under the state program.
26. What does “substantially equivalent” mean?
    1. Under the statute, to be deemed “substantially equivalent” a private plan must provide benefits for all reasons specified under the statute, cover all family members as defined under the statute, provide at least 10 weeks of aggregate leave per benefit year, not cost the employee any more than they would owe under the state plan, and provide the employee with a monetary benefit that meets or exceeds the state plan.
27. If the employer’s private plan substitution has been approved does the employer still have to pay premiums into the state program?
    1. No, an employer that has been approved is exempt from the requirements to pay premiums for the year in which the employer filed an application to obtain a private plan substitution.
28. If an employer has a private plan but it has not been approved by the state does the employer have to contribute to the fund?
    1. Yes. If an employer has not been approved for private plan substitution, the employer is responsible for paying premiums to the Fund.
29. How does an employer become approved for private plan substitution?
    1. Applications for substitution may be made after April 1, 2025. Applications for substitution must be submitted online on a form provided by the Department and are accepted on a rolling basis.
30. Because applications for substitution cannot be made until after April 1, 2025, does an employer still have to pay premiums for the first quarter of 2025?
    1. Yes. At this time, all employers will owe premiums for the first quarter of 2025.
31. When is an employer able to stop paying premiums if they have or plan to have a private plan?
    1. It depends on when the private plan exemption is approved.
       1. If an exemption is approved before May 1, 2026, and has a May 1, 2026, effective date, the employer may stop making contributions beginning the first day of the quarter in which the application is approved, as long as the application is submitted more than 30 days before the end of the quarter.
       2. For exemptions approved after May 1, 2026, the exemption will be effective the first month after it is approved.
32. How long is an approved substitution valid for?
    1. Three years.

What About A Leave That Will Pose An Undue Hardship?

33. What if, after an employee has requested leave, the employer believes granting the leave would have a detrimental effect on their business?
    1. The employee would still be entitled to leave, but the employer may be able to attempt to change the timing of the leave itself, if the employer can show that the timing would create an “undue hardship.” Under the current regulations, if an employer believes this is the case, they must:
       1. Provide a written explanation to the employee that demonstrates how the employee’s absence and the specific timing of the requested leave will cause significant impact on the operation of the business or significant expenses.
       2. Provide the employee with the ability to take leave within a reasonable time frame relative to the proposed schedule.
       3. Make a good-faith attempt to work out a schedule for leave that meets the employee’s needs without unduly disrupting the employer’s operations.
34. What if the employer and employee cannot reach an agreement?
    1. The employee will file their leave request, and the state Administrator will collect information from both the employee and employer regarding the hardship and scheduling of leave.
       1. If the Administrator determines the finding of undue hardship is reasonable, they impose a “reasonable schedule provided by the employer” if the employee’s health care provider also finds it reasonable.
       2. If the Administrator determines the finding of undue hardship is not reasonable, the leave is processed based on the employee’s requested leave schedule.
35. Can an employer fully deny a request for leave based on undue hardship on the business?
    1. No, under the regulations an employer must create some sort of leave schedule. An undue hardship may be used to support a change in timing of the proposed leave, but not the leave itself.

What Do Employers Need to Begin Doing Now?

• Prepare 2025 budgets with the understanding that employers with 15 or more employees will have an additional 0.5% cost associated with wages paid to Maine employees.
• For employers outside of Maine, determine which employees are covered by the ME PFML.
• Talk to your payroll processor and confirm that on January 1, 2025, they will be deducting an additional 0.5% of wages from employees’ paychecks to cover the costs associated with the program.
• Begin understanding the implications this leave will have operationally on your organization in 2026.
• Continue to monitor changes in the regulations related to ME PFML as they affect employers and the implementation of the ME PFML.