Payroll Deductions for Maine’s Paid Family and Medical Leave Program Will Start on January 1, 2025

Quick Hits

• On December 4, 2024, the Maine Department of Labor released final regulations for the state’s paid family and medical leave program.
• Employers must start payroll withholdings for the state’s paid family and medical leave program on January 1, 2025.
• Employers can apply for a private plan substitution after April 1, 2025, and must submit payroll contributions until a private plan substitution is approved.

Payroll deductions for Maine’s paid family and medical leave program will start on January 1, 2025. Employers with fifteen or more employees must contribute 1 percent of wages and may deduct up to half of this contribution from employees’ wages. Employers with fewer than fifteen employees must contribute 0.5 percent of wages and may deduct the entire amount from employees’ wages.

Employers will be required to register in the Maine Paid Leave Contributions Portal when it opens in January 2025. Those with third-party payroll providers can designate them during the registration process.

An employer that fails to pay premiums or submit contribution reports may be subject to a fine of 1 percent of its total quarterly payroll.

Covered workers will be entitled to take twelve weeks of paid time off for family leave, medical leave, to deal with the transition of a family member’s military deployment, or to stay safe after abuse or violence. Benefits are expected to begin for workers on May 1, 2026.

The law covers time off for workers to care for a new child (through birth, adoption, or fostering), to care for a family member with a serious health condition, to address their own medical needs, or to seek help after facing abuse or violence.

Temporary and intermittent employees are covered under the law. The definition of “family member” includes a spouse, domestic partner, biological child, adopted child, foster child, stepchild, parent, stepparent, grandparent, grandchild, sibling, or designated individual with whom the covered employee has a significant personal bond “that is or is like a family relationship, regardless of biological or legal relationship.”

Next Steps

Employers with workers in Maine may wish to take steps to verify that their third-party payroll vendors are ready to comply with the state’s paid family and medical leave law no later than January 1, 2025.

Businesses may wish to consider the impact of the paid family and medical leave law on their staffing protocols.

Employers can apply for private plan substitutions after April 1, 2025, but will still need to remit their payroll contributions until their plans are approved by the state. An approved substitution will remain valid for three years.

To be approved, the substitute plan must be either a self-funded plan that requires a surety bond paid to the state, or a fully funded plan purchased from an insurance company. An internal paid leave policy alone will not satisfy the legal requirements.

Ogletree Deakins’ Leaves of Absence/Reasonable Accommodation Practice Group and Portland, Maine, office will continue to monitor developments and will provide updates on the Maine and Leaves of Absence blogs as new information becomes available.

Aimee B. Parsons is a shareholder in Ogletree Deakins’ Portland, Maine, office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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