Effective January 1, 2025:
Governor Janet Mills signed a Budget Bill that creates a State Paid Family and Medical Leave (PFML) program. Contributions will begin on January 1, 2025 with benefits becoming available on May 1, 2026. This program will be administered by Maine’s Department of Labor.
Maine’s Paid Family and Medical Leave Program applies to all eligible employees in the private and public sector and self-employed individuals, except for employees of the federal government, regardless of employer size.
To be eligible, employees must be either full-time or part-time and have earned at least six times the state average weekly wage in the first calendar quarters immediately preceding the first day of an individual's benefit year.
Private employers that offer equivalent or greater paid leave benefits may apply to the state for a waiver to avoid participating in the state's program.
The state will impose a 1% payroll tax which will be split evenly between the employer and employee. Beginning January 1, 2025, and each quarter thereafter, employers must remit the contributions to Maine’s DOL.
A self-employed individual who elects coverage shall pay 50% of the premium required for an employee on that individual's income from self-employment.
The PFML program will provide paid leave to all eligible employees. The program is broken down as follows:
Employees may take both family and medical leave within the same year but will only be eligible for up to 16 weeks within that benefit year. Employees are also able to take PFML intermittently in increments of no less than 8 hours.
The program will replace 90% of an employee's wages for income earned that is equal to or less than 50% of Maine’s average weekly wage, which is currently $1,036. If an employee's average weekly wage is more than 50% of the states average weekly wage, then the wages will be replaced at a rate of 66% up to the maximum weekly benefit.
To calculate the benefit amount, the average weekly wages the employee earned over the preceding calendar quarters will be used (excluding any earnings from bonuses). To note, benefits are not subject to state income tax.
Employees may take up to 12 weeks of paid leave for the following reasons:
"Family member" is defined as, a biological, foster, step, or adopted child; grandparent; grandchild; sibling; spouse; domestic partner; or an "individual with whom the covered individual has a significant personal bond that is or is like a family relationship, regardless of biological or legal relationship."
Maine’s DOL will establish procedures and forms for filing claims for PFML benefits and will specify what supporting documentation is necessary to support a claim for benefits. We expect more information to be made available as the effective date nears.
Leave taken under this bill runs concurrently with leave taken under the federal Family and Medical Leave. Employees may take leave under this subchapter while ineligible for leave under the federal Family and Medical Leave Act of 1993 in the same application year.
Employers are required to post a workplace notice of the benefits available under the program. Employers also must issue written notice to each employee within 30 days of the start of employment that includes an explanation of benefits. The notice must include the following:
An explanation of the availability of family leave benefits and medical leave benefits provided under this subchapter, including rights to reinstatement of employment and continuation of health insurance;
For more information on Maine's wage and payroll tax laws, check out our Maine Wage and Payroll Tax Facts page.
Employers do not need to take any immediate action regarding this PFML requirement as many details are still forthcoming. Paylocity is actively monitoring PFML and will provide updates, particularly as actions become required.
Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.
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