You may have heard recently about Maine’s adoption of a Paid Family and Medical Leave law. While employers and employees will not be required to begin paying a 1% payroll tax to fund the program until January 1, 2025 (one year before PFML benefits become available to employees), now is a good time for employers to create or revisit their leave policies and consider any necessary adjustments.

There are a number of new laws for employers that have gone into effect recently that impact leave policies, and you’ll want to be sure you’re complying with each of the following:

Paid Family and Medical Leave Law

Maine recently joined a small, but growing list of states offering paid family and medical leave programs. Beginning May 1, 2026, eligible employees in the private and public sector can take up to 12 weeks per year of paid family and medical leave for purposes including but not limited to: managing the employee’s own serious health issues or caring for a seriously ill family member; the birth or adoption of a child; the death of family serving in the military in certain circumstances; or for safe leave for issues related to the employee or their family member being a victim of violence.

Maine Vacation Pay Law

Effective earlier this year, Maine now requires employers to pay out any unused vacation time an employee has accrued at the time of the employee’s departure from the company. This law applies to private employers with 11 or more employees and is a change from the previous law that allowed employers to decide by policy whether to pay out vacation time when an employee ceased working. Employers should consider revisiting how vacation time is accrued (e.g., front loading at the start or each year or week to week), whether to call paid leave “vacation time,” and whether to cap the amount of vacation – if any – that employees can carry over year to year.

Earned Paid Leave law

Maine’s Earned Paid Leave (“EPL”) law was enacted in 2021, but confusion remains regarding how it applies for employers who already provide ample paid sick, vacation, or PTO leave. The EPL law requires employers with more than 10 employees to provide a minimum amount of paid leave: 1 hour of earned paid leave for every 40 hours worked, up to 40 hours per year. In addition, this law contains other requirements that employers with more generous leave policies must consider. For example, this law requires leave be allowed for any reason, which may conflict with some employer policies requiring designation as “sick” or “vacation.” The EPL law also prohibits notice requirements of more than 4 weeks, which may conflict with some employer policies requiring 30 days or more in advance to schedule vacations or pre-planned absences.

Maria Fox, Partner at Murray Plumb & Murray. Image provided by Murray Plumb & Murray.

Many employers lack clarity surrounding these new laws and how they intersect. There is no “one size fits all” approach to determine the best paid leave policies, and employers should consult with employment law counsel to determine what works best for their business.

Among other subjects you may want to consider:

• Whether to offer different types of leave (i.e., earned paid leave, vacation, sick, etc.) or have one bucket of PTO or earned paid leave, considering the legal and operational implications.

• Whether and under what circumstances your business will pay accrued but unused paid leave while complying with the new vacation pay law.

• Whether it is best for your business to front-load paid leave or have employees accrue it over time.

• Whether your policies regarding payout of paid leave at the end of employment, notice requirements before taking leave, requests for reasons for leave, and leave designations need updating based on Maine’s various paid leave law requirements.

• Available choices when it comes to creating or updating parental leave and family and medical leave policies in light of the upcoming Paid Family and Medical Leave Law.

• How to plan for the smoothest paid leave policies that work for your business and your employees while minimizing legal risk.

Murray Plumb & Murray’s Employment Practice Group is available to help navigate the path forward, for both employers and employees with concerns about these new laws.

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