Aug. 28 – The Maine Department of Labor on Wednesday published revised rules for the state’s paid family and medical leave program, including a major change aimed at making the program more business-friendly.
The Maine Legislature passed a bill signed by Governor Janet Mills last year that established 12 weeks of paid parental leave. The adoption of technical rules is a key part of creating the program in time to offer the leave benefit to Maine workers in 2026.
The new law imposes a 1% payroll tax, to be split equally between workers and their employers, to pay for paid parental leave for eligible workers. It would pay up to 90% of normal pay for up to 12 weeks for workers who are sick or have to care for newborns or other family members, among other reasons.
The Maine Chamber of Commerce criticized the original version of the rules because businesses could not opt out of paying the taxes until the program started, even if they already offered an equivalent private plan. The state plans to start collecting the taxes in January 2025 to build up enough tax contributions to pay out benefits beginning in May 2026.
The Chamber of Commerce’s objection was that some companies would pay taxes for more than a year for a program they would not use because they would be eligible to opt out by offering a privately equivalent benefit.
Under the previous version of the proposed rules, companies could only opt out of the program starting in May 2026.
But the new version will allow companies that can demonstrate that they offer their employees an equivalent or better paid parental leave plan to opt out from April 2025.
The public can comment on the revised rules through Sept. 30. A public hearing will be held at 9 a.m. Sept. 17 in the Frances Perkins Room at the Maine Department of Labor.
Sen. Mattie Daughtry, D-Brunswick, and Rep. Kristen Cloutier, D-Lewiston, sponsors of the paid parental leave bill, said in a joint written statement that the Department of Labor is doing a thorough job of creating strong rules.
“Maine’s Paid Family and Medical Leave Program is going to be one of the most significant and transformative policies our state has seen in decades, giving all Maine residents access to a new benefit,” Daughtry and Cloutier said in a statement. “It’s critical that we have strong rules in place when we launch this program, and we’re so grateful for the second chance for both employees and employers to provide feedback.”
This story is being updated.
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