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V O L . X X X I N O. X X V I N OV E M B E R 1 7 , 2 0 2 5 14 L AW / P O L I C Y F O C U S M aine's Paid Family and Medical Leave law — which takes effect May 1, 2026 — will give employees the option of taking time off to attend to a serious health condition or a family member's health, the birth of a child or that of a domestic partner, adoption or fostering by the employee or their domestic partner. It will also cover personal situations like dealing with the transition of a family member's impending military deployment or to stay safe, or to help a family member stay safe after abuse or violence. LD 1964 was signed into law in July 2023 and will afford all of Maine's 680,000 workers, including those who are self-employed, full- or part-time, 12 weeks of paid time off, at 90% of their compensation rate. e plan will provide the most generous benefits of any state's plan and is predicted to be one of the more onerous and expensive for employers. Wage replacement rates for the other 14 states that have enacted some form of leave policy range from 50% to 80%. From an employee's standpoint, it's a generous perk. For employers getting prepped for the new law, it has been a major headache. "e Chamber is very frustrated by how this was implemented. e state has been working extremely hard, but we haven't always agreed with the outcome of the process," says Patrick Woodcock, president and CEO of the Maine State Chamber of Commerce, which represents over 5,000 employers. "It's such a massive undertaking, and should have included a fiscal note, explaining the additional cost of management and contributions," he adds. "It's one of the most significant laws to affect the state economy in 30 years." The devil is in the details One potential weakness in the law that Woodcock sees is in the state's definition of a family member: "A child, domestic partner's child, grandchild, domestic partner's grandchild, parent, domestic partner, sibling or spouse." "ere are going to be incentives to utilize and to overutilize it," says Woodcock. "ere is going to have to be an ongoing review." An authority to oversee the new law is scheduled to meet quarterly and an actuarial study will be due in 2026. "But ultimately," Woodcock says, "the entire pro- gram really rests in the Maine statute as administered by the Department of Labor." Employee eligibility could be an issue To be eligible, workers must have earned at least six times the state average weekly wage over a base period. As of July 1, the average wage for 2025 is $1,199 and the maximum weekly benefit is capped at that annual average wage. But there's a bit of a loophole in that an employee could be eligible to take leave with a new employer, "on day one," Woodcock says, if they've met the threshold income in a previous job. "We have been pushing for a change in the leg- islation that would only allow the employee to be eligible after 120 days at that employer to be eligible for PFML benefits." An employee must have put in at least 120 consecu- tive days in order to have job protection when they take leave. (More details can be viewed on the Maine Department of Labor website.) "Most small businesses are struggling with how the new law will impact operations on a day-to-day basis," notes employment attorney Tawny Alvarez, a partner at the Portland law firm Verrill, "especially when we discuss the difference between current obligations and what they can expect if the same circumstances were to happen a year from now once the law is in effect." Seasonal businesses could face workforce shortages Temporary foreign workers in Maine returning under the H-2B visa program are also eligible for 12 weeks paid time off, Woodcock says, if they meet the work hours eligibility — an allowance that could be espe- cially challenging for businesses that rely on having a reliable workforce during the summer tourist season. "We have a very tight labor force, and a very sea- sonal economy," Woodcock notes. "Losing a critical worker during a business's prime season is a real pres- sure point. is is going to be a real test for those that are experiencing workforce pressures to begin with." Colby Marvin Bracy, director of people and oper- ations at the Nonantum Resort in Kennebunkport, which has 109 guest rooms, several restaurants, a pool, a riverside marina and events and wedding spaces. e Nonantum employs close to 180; of those, 150 are seasonal workers. "Paid family leave is an important benefit, but Maine's new program presents some real challenges for employers like us," Bracy tells Mainebiz. "Currently, all of our employees — full-time or not — receive eight weeks of paid parental leave at 100% pay, plus an additional four weeks unpaid under the federal Family and Medical Leave Act. "Under the state plan, some of our employees could actually earn less over twelve weeks of partial pay than they do under our existing policy, while also being required to contribute to the program." Funding the program e legislature allocated a one-time appropriation of $25 million to establish the program, but going forward it's being funded primarily by payroll taxes. Starting in January 2025, employers with more than 15 staff have been required to contribute 1% of employee wages to the plan, and they can deduct up to half of that from paychecks. Companies with fewer than 15 employees must con- tribute 0.5% of total wages, but can elect to contribute the entire amount from employee paychecks. Woodcock notes that the new program has already cost the state money when government entities, state universities and community colleges made contributions in the first quarter of 2025 for both employers and employees. Generous perk or employer headache? Maine businesses get ready for Paid Family and Medical Leave law B y T i n a F i s c h e r P H O T O / T I M G R E E N WAY The seasonal hospitality industry is among the industries that is coming to grips with Maine's new Paid Family and Medical Leave law, as Colby Marvin Bracy at the Nonantum Resort says. It's one of the most significant laws to affect the state economy in 30 years. — Patrick Woodcock Maine State Chamber of Commerce

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