Q&A: Maine’s Pioneering Paid Leave Law

L.D. 369 was initially titled “An Act to Support Healthy Workplaces and Healthy Families by Providing Earned Paid Sick Leave to Certain Employees.” However, it was transformed during the amendment process into “An Act Authorizing Earned Employee Leave,” a title reflecting its mandate that covered employers provide paid leave to be used not just for illness, but for any reason. When Governor Mills signed the bill last week, Maine apparently became the first state to require employers to offer paid leave to be used at employees’ discretion.

When does the paid leave law take effect?
The paid leave statute will go into effect on January 1, 2021.

Which employers are required to offer paid leave?
Any employer that employs more than 10 employees for more than 120 days in any calendar year must provide paid leave in accordance with the statute. Thus, seasonal employers who employ more than 10 individuals fewer than 120 days each year will not be subject to the statute.

How is paid leave accrued?
The statute provides that employees are entitled to earn at least one hour of paid leave for every 40 hours worked, up to a total of 40 hours per year. The leave must be paid at the rate of pay the employee received immediately before taking the earned leave.

When does an employee start accruing leave?
Employees must begin to accrue leave at the time of hire. Employers may prohibit the use of accrued leave until the employee has been with the employer for 120 days during a one-year period, however.

Must the employee provide advance notice of their intent to use paid leave?
The statute requires employees to provide “reasonable” notice of their intent to use leave, unless they are prevented from doing so because the leave is to address an emergency, illness, or other sudden necessity. Where possible, employers may insist that leave be scheduled to prevent undue hardship on the employer’s operations.

Will my business soon be balancing local paid leave requirements too?
No. The statute prohibits cities and towns from enacting paid leave ordinances. State law cannot preempt federal law, however. Thus, if Congress heeds recent calls for federal paid family leave, employers could find themselves balancing two different paid leave requirements nonetheless.

What about existing collective bargaining agreements that provide for something else?
The statute does not apply to employees covered by collective bargaining agreements between January 1, 2021 and the expiration of those agreements. Any new collective bargaining agreements entered into after January 1, 2021, however, must be at least as generous as the paid leave statute.

Are employees entitled to carry over sick leave from year to year, or to be paid out accumulated sick leave upon termination?
The statute is silent about whether employers may adopt “use it or lose it” policies with respect to paid leave. Accordingly, there is no prohibition on employers requiring that employees use their paid leave in the year it is accrued, and employers may adopt a policy that accrued leave is not paid out upon termination.

My company’s employees earn sick time, but not vacation time that can be used for any purpose. Do I need to make some changes to comply with the statute?
Yes. The statute requires covered employers to provide paid leave to be used for any reason. Employers who currently restrict the use of paid time off to personal or family illness must either revise their policies to remove this restriction or create an additional benefit that complies with the statute.

My company’s employees accrue paid time off at a more generous rate than the statute. Does that mean I do not need to do anything before January 2021 in order to comply with this law?
It depends. Unlike Massachusetts’ paid sick leave law, Maine’s paid leave statute does not contain reporting or carry over requirements that might conflict with employers’ existing practices. Employers should check their policies to ensure that the notice requirements do not require more than a “reasonable” amount of advance notice or preclude the use of paid time off that is not scheduled in advance, however. The statute requires only “reasonable” notice of the intent to use leave and requires no advance notice when circumstances render it impossible. The term “reasonable” is undefined and so precisely how much advance notice employers may require for the use of paid leave remains to be seen. Employers with policies that preclude the use of paid leave absent a certain amount of advance notice should revise their policies to make clear that paid leave may be used for emergencies, illness, or in other situations that cannot be anticipated in advance.

For additional information on this topic, or for any employment law-related issue, please contact Employment Practice Group partner Katy Rand at 207.791.1267 or krand@pierceatwood.com.