Maine’s New Paid Leave Rules: Here’s What Businesses and Workers Should Expect

The Maine Department of Labor (MDOL) released Wednesday the final rules for the state’s new Paid Family and Medical Leave (PFML) program set to launch, in part, in just four weeks.

These rules include several updates from the second draft released for public comment in September, most notably with respect to employers’ ability to assert that an employee’s request for leave would constitute an “undue hardship” on their business.

Over the summer, Gov. Janet Mills (D) signed a budget into law that included, among other things, legislation establishing the program with a starting appropriation of $25 million for the MDOL.

Beginning in the spring of 2026, Maine workers will be eligible to take up to twelve weeks of paid leave to care for a sick family member, as well as to bond with a newborn baby or newly adopted child. Also eligible for leave are those who are experiencing a serious health condition and are rendered unable to work for an extended period, and anyone serving as a caregiver for someone who meets the other conditions.

Employers and employees will begin contributing a new one percent payroll tax to the state on January 1, 2025, sixteen months ahead of when benefits are scheduled to first become available.

Click Here for More Information on the Paid Family and Medical Leave Program

Under the final version of the rules, employees seeking leave must give their employers at least 30 days written notice of their intent to take a leave of absence under this program, except under certain emergency circumstances where a “good faith effort” must be made to do so as soon as possible.

Employers will then have the ability to assert that the timing or duration of an employee’s requested leave creates an undue hardship that cannot be overcome with the amount of notice given.

Largely unchanged from the second version of the rules are the requirements that must be met for an employer’s claim to be satisfied, including providing the employee a written explanation of why their request for leave would be harmful to the business.

Despite this, employees must retain “the ability to take leave within a reasonable time frame relative to the proposed schedule,” and “a good faith attempt” must be made to work out a schedule that would not be disruptive of the employer’s operation.

If medical leave is requested, the final schedule agreed upon by the employer and the employee must “be sufficient to accommodate the healthcare needs of the employee” as determined by the employee’s healthcare provider.

[RELATED: Maine Businesses Brace for New 1% Payroll Tax and Paid Leave Mandate]

When filing for benefits, the updated rules require that the documentation employees submit from their or their family members healthcare providers must include the anticipated duration of leave in addition to other relevant information.

Other changes made between the second and final versions of the rules include defining what constitutes “good cause” for an employee to not make a timely filing, as well as reworking the length and timing of the waiting period prior to receiving benefits.

The final version of the rules also outline a new method for calculating the state average weekly wage and an employee’s individual average weekly wage.

Click Here to Read the Fully Annotated Version of the Final Rules

Note: The most recent editions are marked with green text and a double underline. The most recent deletions are marked with orange font, a strike-through, and a double underline.

Although many of the major structural elements of this program were already outlined by the Legislature, most of the specifics were left up to MDOL and a commission formed to administer the program.

Advancing the bill in this manner allowed lawmakers to get the measure approved without debating specific details, but it also created a significant amount of uncertainty for Maine businesses that will now be required to comply with various mandates, changes to tax collections, and paid leave allowances.

The rules set by the MDOL fill in the gaps, going into greater detail regarding the nuts and bolts of the requirements that the program will impose on Maine businesses in a matter of weeks.

Although the final version of the rules published Wednesday brings some clarity to how the program will work in practice, there is still a fair amount of ambiguity over how the regulatory language will be interpreted, and final disputes will be arbitrated by a government commission.

In an interview with the Maine Wire over the summer, Maine State Chamber of Commerce CEO Patrick Woodcock suggested that the timeline for the program’s implementation is far too rapid given the scale of the policies being instituted.

“I do think that the timeline of the entire program had a fundamental misunderstanding of the scale of this initiative,” Woodcock said. “It is the biggest program for the State of Maine government to set up in a generation.”

Woodcock also underscored the nature of how this program will fundamentally impact employers throughout the state, expressing concern that many businesses may not yet fully grasp the scope of the changes that will be wrought by the program.

“I think a lot of businesses are trying to navigate in 2024 the combination of inflation, labor scarcity, and now this additional payroll tax, and what in 2026 will be the management of a workforce that is now eligible for twelve weeks of leave,” said Woodcock.

[RELATED: State Launches Webinar Series as Maine’s New Payroll Tax & Paid Leave Mandate Looms]

According to Woodcock, there appears to be a lack of understanding of the “scope of this law and the proposed rules,” despite most executives and human resources officials having a general awareness of the program’s existence.

“I’m incredibly concerned that many businesses are unaware of what’s about to hit them,” he said. “The details matter, trying to think how this would impact an individual business…in terms of just managing your workforce, I don’t think a lot of businesses understand what’s going to really be taking effect in 2026.”

In addition to a series of webinars held throughout October in conjunction with a range of organizations, including the Maine State Chamber of Commerce, the MDOL has made a one-page document outlining what employers need to do in preparation for 2025.

Click Here to Read the MDOL’s PFML One-Pager