On July 11, 2023, Maine Governor Janet Mills signed into law SP 800, which establishes a state paid family and Medical leave (PFML) program. Employers will begin collecting the premium effective January 1, 2025, and PFML benefits will begin May 1, 2026. The program will be administered by the Maine Department of Labor (Department). (Maine Department of Labor website.)

Covered employers

Covered employers include:

• Any person, sole proprietorship, partnership, corporation, association or other business entity that employs employees at a location within Maine
• The state of Maine, including the executive, legislative and judicial branches, and a state department or agency and political subdivisions
• A county, city, town or municipal agency
• An agent of an employer
• A public employer

The federal government is exempt from the requirement to participate in the program.

PFML Premium rate

Beginning January 1, 2025, the premium may not be more than a combined rate of 1% of wages up to the federal Social Security wage base. The premium rate will be adjusted annually for inflation starting in 2028.

Employers with 15 or more employees pay 100% of the premium but may deduct up to 50% from employees' wages. Employers with fewer than 15 employees may deduct 50% of the premium from employees' wages but are not required to pay the remaining 50%.

Covered wages are defined as "actual compensation paid to an employee for the performance of services."

PFML benefits

Covered individuals are eligible for up to 12 weeks of family leave, 12 weeks of medical leave and an aggregate of not more than 16 weeks for both family and medical leave in an application year.

Medical leave is available for a serious health condition that makes the covered individual unable to perform the job functions for the position held by that covered individual. A serious health condition is an illness, injury, impairment, pregnancy, recovery from childbirth or physical, mental or psychological condition that involves inpatient care in a hospital, hospice or residential medical care center or continuing treatment by a health care provider.

Family leave is available for any of the following reasons:

• To bond with the covered person's child during the first 12 months after the child's birth or for the first 12 months after the placement of the child for adoption or foster care with the covered person
• To care for a family member with a serious health condition
• To attend to a qualifying exigency
• To care for a family member of the covered person who is a covered service member
• To take safe leave
• Any other reason specified in the law

Employer notice requirements

Employers are required to post in a conspicuous place at each workplace location a notice of the PFML benefits available. The notice must be in English and each other primary language of three or more of its employees at that workplace location.

Employers are also required to give notice to each employee not more than 30 days from the employee's beginning date of employment. The notice must include the following information:

• An explanation of the availability of family leave benefits and medical leave benefits, including rights to reinstatement of employment and continuation of health insurance
• The employer's contribution amount and obligations
• The name and mailing address of the employer
• The identification number assigned to the employer by the Department
• Instructions on how to file a claim for family leave benefits or medical leave benefits
• The mailing address, email address and telephone number of the Department
• Any other information required by the Department

Private plans

An employer may apply for approval of a private plan that confers the same rights, protections and benefits provided to employees under the state plan. Employers with an approved private plan are not required to participate in the state program.

Ernst & Young LLP insights

Maine joins 15 other jurisdictions (California, Connecticut, Colorado, Delaware, District of Columbia, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont and Washington) that are now operating, or will soon be operating, paid family and medical leave insurance programs.

For more information about these state plans, see our 2023 US employment tax rates and limits special report.

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Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor