Paid Family and Medical Leave Coming to Maine Nonprofit Employers

Posted By: Rob Levin Advocacy + Government, Financial Management, Legal, Staff + Volunteer Teams,

Reprinted with permission from The Maine Nonprofit Law E-Bulletin September 2023, by Robert H. Levin, Attorney-at-Law, Law Office of Robert H. Levin

While you were off at the beach or in the woods in the middle of July, the Maine Legislature passed one of the most thoughtful and comprehensive paid family and medical leave bills of any state to date. Huzzah! Now, what’s it all mean for Maine nonprofits? 
Here’s a basic overview of the new law. If you want to look under the hood at the 21 pages of statutory language, have at it, but it’s not for the faint of heart. In a nutshell, the law establishes up to 12 weeks of paid family and/or medical leave per year to all eligible employees. Paid family and medical leave will not come directly from the employer, but rather from a state fund. The fund will be paid for by a 1% payroll tax, split evenly between the employer and employee. 
As you’ll see, there’s no exemption for nonprofit organizations; they are treated just like any other employer. That means that all nonprofit employers of Maine-based employees will have to take affirmative steps to comply with the law. Employers with fewer than 15 employees are exempt from having to make employer contributions, but they will still have to withhold the employee’s contribution.
The statute is complex, and the Maine Department of Labor is tasked with issuing rules by January 2025, which is also when employers will have to begin the payroll tax withholding. The rest of the law doesn’t take effect until May 2026.  
So what should Maine nonprofit employers be doing in the meantime? Well, there’s not a whole lot to do until January 2025, when the new rules will be issued. Hopefully, setting up the withholdings will be a simple process, especially if a payroll company is involved. Nonprofits that have existing unpaid or paid family and medical leave policies will want to update or replace those policies at some point in 2025, mostly likely by simply referring to the new law. 

Meanwhile, employers with 50 or more employees are already subject to the federal Family and Medical Leave Act of 1993, which entitles employees to take unpaid leave of up to 12 weeks in a one-year period. Maine’s new paid leave law will be more expansive than, and therefore supersede, the federal law. In other words, employers of 50 or more employees won’t have to offer both 12 weeks of paid leave under Maine’s law plus an additional 12 weeks of unpaid leave under the federal law.