Recent changes to the Maine Paid Family and Medical Leave program

Maine became the thirteenth state to create a paid family and medical leave (PFML) program when it established Maine PFML in October 2023. Under the Maine program, eligible workers may be able to take 12 weeks of paid time off in a given year for qualifying family or medical reasons, beginning May 1, 2026. The program is paid for through employer and employee contributions to a state fund. These contributions begin January 1, 2025.

In the spring of 2024, regulators in the Maine Department of Labor proposed rules to specify how the PFML program will work. There was significant public comment to those initial rules and revised rules were proposed for comment on August 28 of this year. This article provides information on the proposed rules and how they could affect organizations with employees working in Maine.

• Proposed rules for private plans
• Proposed rules about undue hardship for employers
• Other proposed rules of interest
• How to get involved and learn more

Proposed rules for private plans

Employers can apply to be exempt from the state-run program by substituting their own “substantially equivalent” private plan, either a plan purchased from an approved insurance carrier or their own self-funded plan. The proposed rules revise the timeline for the private-plan process and add some clarity to the definition of a substantially equivalent plan.

• All employers will owe premiums for the first quarter of 2025.
• If an exemption is approved before May 1, 2026, and has a May 1, 2026 effective date, the employer may stop making contributions to the Maine PFML program beginning the first day of the quarter in which the application is approved.
  • Exception: If the application is submitted less than 30 days before the end of the quarter, the exemption is effective the first day of the quarter following submission of the application. Examples:
    • Application submitted May 1, 2025, approved May 15, 2025, exemption effective April 1, 2025
    • Application submitted June 10, 2025, approved June 25, 2025, exemption effective July 1, 2025

For exemptions approved after May 1, 2026, the exemption will be effective the first of the month after it is approved. Exemptions are valid for three years.

• Provide benefits for all the reasons specified under Maine PFML
• Cover all family members as defined under Maine PFML
• Provide at least 10 weeks of leave
• Not cost the employee any more than they would owe under the state plan
• Provide the employee an aggregate monetary benefit that meets or exceeds the state plan
  • Example: If the equivalent plan provides 10 weeks of leave, it must provide a greater rate of wage replacement than the state plan, so that the total monetary benefit is equal to or greater than what the employee would have received if they took 12 weeks of leave at the state’s benefit amount.

Proposed rules about undue hardship for employers

The Maine PFML statute specifies that an employee must give their employer reasonable notice of their need for leave and that leave must be scheduled to prevent undue hardship to the employer — as reasonably determined by the employer. The proposed rules provide some clarity around the process of determining whether a leave creates an undue hardship. However, it appears this will still be a complex and administratively burdensome process for the employer.

Under the Maine PFML program, a leave may create an undue hardship for the employer if it has a significant impact on the operation of the business or creates significant expenses, considering the financial resources of the employer, the size of the workforce and the nature of the industry.

The proposed rules set out this process for an employer to follow in claiming undue hardship:

First, the employee works with the employer, specifying the reason for leave, the leave schedule (intermittent, continuous) and the timing/duration of leave. Then, one of two things happens:

1. The employer and employee agree to a schedule of leave. The employer provides a “waiver” stating there is no undue hardship. The employee submits this with their application for leave and the administrator processes the claim as requested. Or:
2. The employer determines that the leave schedule creates an undue hardship. For the determination of undue hardship to be reasonable, the employer must:
   • Provide a written explanation to the employee demonstrating, based on the totality of the circumstances, how the specific employee’s absence and the specific timing of the requested leave will cause significant impact on the operation of the business or significant expenses
   • Provide the employee with the ability to take leave within a reasonable time frame relative to the proposed schedule
   • Make a good-faith attempt to work out a schedule for leave that meets the employee’s needs without unduly disrupting the employer’s operations

If (B) occurs the employee and employer can’t reach agreement, the employee files their leave request and the state Administrator collects information from both the employee and the employer regarding the hardship and scheduling of leave.

If the Administrator determines the finding of undue hardship is reasonable, they impose a “reasonable schedule provided by the employer.” If the leave is medical, the employee’s health care provider must review the employer’s proposed leave schedule and determine whether it is reasonable.

If the Administrator determines the finding of undue hardship is not reasonable, the leave is processed based on the employee’s requested leave schedule.

Other proposed rules

Employers should take note of these other proposed rules in the August 2024 update:

The term “affinity relationship” has been removed. The rules now use the original statutory term of “significant personal bond” to describe a qualifying relationship of a person for whom the employee is providing care. The rule also removed the limitation that an employee could only designate one person meeting this definition per benefit year.

A “significant personal bond” may be demonstrated by, but is not limited to, the following factors, with no single factor being determinative:

• Shared personal financial responsibility, including shared leases, common ownership of real or personal property, joint liability for bills or beneficiary designations
• Whether the employee or the other individual in the relationship designate each other as emergency contacts
• The expectation to provide care because of the relationship or the prior provision of care
• Cohabitation, along with its duration and purpose
• Geographic proximity
• Any other factor that demonstrates the existence of a family-like relationship

The rules provide a definition of wages, which is the same as that used for Maine unemployment insurance. This should simplify quarterly wage reporting.

Employees must abide by the employer’s reporting policies for intermittent leave, in addition to reporting the time under the PFML program. Note: There is nothing in the statute or regulation that specifies the consequences to the employee if they do not provide proper notice to the employer.

Leave taken in the past 12 months under the federal Family and Medical Leave Act (FMLA) or the Maine Family Medical Leave act (ME FML) will be deducted from the Maine PFML entitlement if leave was for a qualifying reason under Maine PFML.

The rules provide the method for determining employer size (for purposes of premium liability). Each Federal Employer Identification Number (FEIN) is a unique employer for these purposes:

• If the employer employed 15 or more covered employees (employees collecting wages in Maine) on their payroll in 20 or more calendar workweeks during the 12-month period preceding September 30 of each year, they will be considered to be an employer of 15 or more employees for the following calendar year.
• This count includes full-time, part-time, temporary and intermittent employees, along with any workers who are on paid sick leave, on paid holiday, or who work during only part of the specified pay period.

Premiums are deducted from employee’s regularly scheduled paychecks, but the employee and employer may mutually agree to less-frequent deductions as long as the agreement is voluntary and in writing, and deductions are made at least quarterly.

How to get involved and learn more

Under Maine law, the Maine Department of Labor must post draft rules for public comment for a period of at least 30 days. As an insurance carrier and employer with many employees in Maine, Unum has been and will continue to be engaged in the rulemaking process.

But you have a voice, too. You can provide comments on the latest Maine PFML rules at the Maine Department of Labor website until September 30.

For more information on Maine PFML and the latest rules:

• Register for our September 26 webinar to learn more about the latest updates and get your questions answered by our experts.
• Check out our Maine PFML information page.