Intro to Maine Labor Laws

Maine requires employers with 5 or more employees to enroll their “covered” employees in the Maine Retirement Investment Trust (MERIT) or an equivalent employer-sponsored retirement plan. MERIT is a state-sponsored Roth IRA funded through payroll deductions, starting at 5% and increasing to 10%. Employers with 15 or more covered employees had to certify their exemption or enroll in the program by April 30, 2024; employers with 5 to 14 covered employees had to do the same by June 30, 2024. 

Companies with existing qualified retirement plans are exempt, but must certify their exemption with the state. Penalties for non-compliance will not begin until 2025.

Governor Mills recently amended the state’s final wages statute (H.P. 160) to require private employers with more than 10 employees to pay all accrued, unused vacation upon termination beginning next year.

Previously mentioned in August, Maine’s “An Act Relating to Fair Chance in Employment” went into effect on October 18. This act prohibits Maine employers from inquiring about an applicant’s criminal history on an initial application and from indicating that a candidate with a criminal history should not apply or will not be considered for a position, subject to limited exceptions.

Maine passed a new paid family and medical leave law that will provide eligible employees with up to 12 weeks of family and medical leave benefits per year. This paid family and medical leave program will require all private employers to provide employees with leave, with paid benefits funded through employer and employee payroll tax contributions. Reporting requirements and payment of premiums will begin January 1, 2025, and employees will be able to utilize benefits through the program beginning May 1, 2026.

Employees will be entitled to job protection and continuation of health insurance coverage while on paid family medical leave. The paid leave benefits will be calculated based on an employee’s and the state’s average weekly wage amount, up to a designated weekly cap, and paid directly by the state. Employers should stay tuned for more guidance and updates from the state about plan administration on this new program.

On April 20, Governor Mills signed an amendment to the Maine Human Rights Act, which expands the definition of racial discrimination in employment and education to specifically include discrimination based on traits associated with race, including hair texture or hairstyle (LD 598).

Maine has a couple of employment-related laws going into effect on October 18, 2021.

Notably, Maine has passed a “ban-the-box” law, prohibiting employers from inquiring about an applicant’s criminal history on an initial application and from including on the application or advertisement that a candidate with a criminal history should not apply or will not be considered for the position, subject to limited exception.

Governor Mills also signed a law expanding the eligibility requirements for Maine’s Family and Medical Leave Act in order to include grandparents who need to care for a grandchild or a domestic partner’s grandchild with a serious health condition.