• New PTO rules released - Law giving all hourly workers PTO time takes effect on January 1, 2021

    Breaking News | September 14, 2020
    from the Maine State Chamber
    The Maine State Chamber of Commerce
    is sharing the following breaking news items with you in an effort to keep you informed of important issues that impact our business community. 
    Long-awaited, earned paid time off rules released
    Law giving all hourly workers PTO time takes effect on January 1, 2021
    After more than a year of work, the Maine Department of Labor (DOL) today released its final rules outlining the specifies of Maine’s earned paid leave law. The rulemaking process is part of an ongoing public input process that started after the passage of the bill by the Legislature in 2019. After months of gathering comments and input from around the state, the Maine Department of Labor released its draft rules that helped to determine the implementation and operation of Maine’s paid time off (PTO) law, which sprung out of LD 369, An Act Authorizing Earned Employee Leave. LD 369 was enacted after numerous negotiations between Governor Janet Mills’ administration, legislators, and the business community. Originally more than 10 pages long and focused on providing full- and part-time workers with paid sick leave, the bill was re-drafted by the governor to instead provide PTO to the same group of employees. The revised bill was less than a page-and-a-half long, and while it laid out the basics of the leave parameters, it left much of the specifics to rulemaking, which would be conducted under the direction of the Maine DOL.
    The law requires any Maine business with more than 10 employees to provide their full- and part-time workers with up to 40 hours of paid time off. Workers accrue one hour of paid leave for every 40 hours worked to a max of 40 hours. They must be employed by the business for 120 days to be eligible to take the leave. The leave can be used for any reason, but employees are supposed to give reasonable notice of intent to take the time.
    As part of the rulemaking process, the department conducted a series of “listening” sessions around the state. The department began this process in late October 2019 and held nearly a dozen meetings from as far north as Presque Isle, to Machias, Portland and Sanford, to name a few. While the comment sessions were for both employers and employees, they were predominantly attended by small businesses that were concerned with the mechanics of implementation, costs, and complexity.
    The result of those listening session were draft rules released for public comment in April. Because of the pandemic, the public hearing on the rules was held virtually. Peter Gore, executive vice president of the Maine State Chamber, provided both verbal and written comments on the rules on behalf of our members. The department took additional comments until the end of April, and then began final implementation of the rules.

    As released today, the highlights of the rules outline the following regarding the law:
    • It is effective January 1, 2021.  
    • Includes all industries except for seasonal industries as defined by 26 M.R.S. sub-section 1251 for employers with more than 10 employees in Maine for more than 120 days in any calendar year. (Further definition of employer may be found in 26 M.R.S. sub-section 1043 sec. 9.
    • Includes all employees – full-time, part-time, temporary, per diem, etc.  
    • Employees covered by collective bargaining agreements (CBAs) as of 1/1/2021 are excluded until the CBA expires. New CBAs after that date must include this benefit at a minimum.   
    • Employees accrue 1 hour of earned paid leave for every 40 hours worked, up to 40 hours in a defined year.
    • Employees can bargain for, or employers can offer, a benefit of this nature that exceeds this standard.  
    • Employers may use their discretion to frontload Earned Paid Leave at the beginning of the year.
    • Employers that allow employees to use Earned Paid Leave before it is accrued may withhold from the last paycheck any amount that the employee had not yet accrued
    • Employees can carry over up to 40 hours from one defined year to the next.  
    • Employees can use up to 40 hours in any defined year.   
    • Salaried employees are presumed to work 40 hours per week unless there is an actual record of time worked.  
    • Employers can apply a 120-day wait period before new employees can use their accrued Earned Paid Leave.   
    • Employees can use their accrued earned paid leave for any reason such as an emergency, illness, sudden necessity, planned vacation, etc.   
    • Employees may be required to give up to 4 weeks advance notice to use earned paid leave for any reason other than an emergency, illness, or sudden necessity.
    • Employees are required to notify employers as soon as practicable if the use of earned paid leave is for an emergency, illness, or sudden necessity.
    In reviewing the details of the final rules governing PTO leave, it appears the department attempted to address many – but not all – of the concerns of the small business community. The clarity around accrual, carry-over leave, the waiting period, front-end loading of the leave, and notice were all things for which employers requested clarity.  However, the rules also allow for incremental use of the leave (in one-hour increments) and cash out of any unused portion of the leave upon separation, much like vacation time if offered. Overall, it appears the department did a thoughtful job developing workable rules for small business owners, while accomplishing the goal of providing accessible paid time off for workers.
    Unfortunately, PL 156 represents a new cost of doing business for many small employers, something the rules cannot change. While businesses of 10 or more employees may provide some form of leave to their full-time workers, this new law ropes in all employees, full and part time. It represents a weeks’ worth of earnings for each employee – a cost that will need to be factored into the budget of every small business. And on top of that is yet another minimum wage increase that will go into effect on the same day this law becomes effective, as well as any higher unemployment taxes that may result from the recent drain on the Unemployment Insurance Trust fund.
    And of course, all of this is on top of an economy still struggling to recover from, and adapt to, the new order associated with a global pandemic.
    The coming months – and the upcoming legislative session – will see many challenges for the business community in Maine. The Maine State Chamber followed the progress of these rules, and the process associated with their development, extremely closely. We are pleased to see that our comments did in fact impact the final rules, and we are thankful to have made a difference in their development. To see the final rules, please visit the Maine DOL’s website.
    For questions or additional information, please contact Peter Gore by calling (207) 623-4568, ext. 107, or by emailing pgore@mainechamber.org.

    Leave a Comment
    * Required field