Hello. I am Sarah Hipp and welcome to Mutual of Omaha's Mini session on Paid Family and Medical Leave. This is one in our series of state overviews and today we will be focusing on Maine. 

If you are familiar with the state mandated paid leave landscape, then you know that this is a rapidly evolving space. Paid Family and Medical Leave programs allow employees to take time off from work to tend to certain life circumstances and this leave is often job protected. Maine is one of a rising number of states that has passed paid leave legislation. Contributions to prefund program will begin on January 1st of 2025 and then workers will be able to receive benefits beginning on May 1st, 2026. 

The Paid Family and Medical Leave program will apply to all employees and employers in the state of Maine, even if the business only employs one employee in the state. The exemption would be for federal government employees who are exempt from the Maine PFML law. Like many states, Maine looks at an individual employee’s earnings within the state to determine eligibility for benefits. The threshold is set at six times the state average weekly wage and the employee needs to have earned that amount over the four calendar quarters prior to taking leave. For job protection to apply, the employee needs to have worked with the employer for at least 120 days when taking leave. 

Let's look at a quick example. The state average weekly wage in Maine is updated every June and as of June 1st, 2024, that amount is $1,144 67. If an employee were to go out on leave, the employee would have needed to earn at least $6,868, which is six times the current state average weekly wage. The state average weekly wage is assessed annually so these numbers may look different once the program rolls out in 2026. 

Earlier I mentioned that Paid Family and Medical Leave programs allow employees to take time off from work during certain life circumstances. So, let's now take a look at what those reasons may be. Maine has separated the benefits into medical leave, which can be taken for the employees own serious health condition or medical needs, and then also, family leave. Family Leave covers several different situations. The most common reason for family leave that we see in most states is bonding with a new child. This can be for both birth parent and non-birth parent as well as for individuals who are welcoming a new child through adoption or foster care placement with bonding leave. All leave must be taken within the first 12 months following the birth or placement. 

Another reason for Family Leave is to care for a family member with a serious health condition. This type of leave follows the same requirements as medical leave, but it is for the employees covered family member rather than for the employee themselves. 

In addition, we have qualifying military exigencies care of an injured service member and safe leave to address needs related to domestic violence or assault. Employees are able to take up to 12 weeks for medical leave and up to 12 weeks for family leave in a benefit year. However, if the employee is needing multiple types of leave in that same year, all time would be limited to a combined 12 weeks.

In regard to the family leave I mentioned before, the Maine law has a broader definition of family member than what we see under the federal unpaid FMLA. In Maine covered relationships include the parent, child and spouse, the same as FMLA does, but also expands to grandparents and siblings as well. 

Another covered relationship that is included under the Maine law is the affinity relationship. This is something we are starting to see in some states as a more inclusive definition and this allows employees to take leave to care for someone with whom they have a close personal relationship, who is not necessarily an immediate relative. I realize this is a very broad definition and states usually do put some parameters around the affinity relationships, which could be something such as shared property or shared financial responsibility or some kind of expectation of care. 

Now we'll get into the financial piece of PFML. Maine has set the initial rate at 1% for when contributions begin on January 1st, 2025. This rate will be split 50/50 between employers and employees, however employers can choose to cover the employee portion of contributions. Premiums will also be capped at the social security wage limit, so once an employee has paid into the Maine PFML program on earnings up to that amount, there are no longer contributions due for that calendar year. This would apply to both the employer and the employee portion of those contributions. 

Finally small employers that are below 15 employees will only be subject to half the contribution rate. Employers can deduct this entire amount from employees so there would not be an employer portion due for contributions for these small employers. 

Here on the slide, we have a few examples of what this could look like for an employer. For easy math let's say the employer has $1 million in payroll. If the employer has 15 or more employees with that 1% contribution rate the Maine PFML premiums would amount to $10,000 that could be split evenly between the employer and employee. If the employer has fewer than 15 employees, then it would only be the employees part of the contributions due at $5,000. 

Maine like many states is using a tiered benefit calculation and the maximum benefit amount an employee can receive will be capped at the state average weekly wage. The first tier in calculating benefits will provide a 90% wage replacement for the employees earnings up to 50% of the state average weekly wage. Higher wage earners with additional income above that 50% mark will then receive an additional 66% income replacement for any earnings above 50% of the state average weekly wage. Also want to point out that Maine has a 7-day waiting period for any medical leaves so the employee will not begin receiving benefits until the 8th day of leave. 

There are so many different percentages referenced in the calculation that I just talked about, so we wanted to take a minute and break down that math to see what a real employee example might look like. Here we have Emma who has an annual salary of $60,000. Using the current state average weekly wage which we showed earlier of $1,144.67, 50% rounded to the nearest dollar would be $573. This is the amount that sets the benefit tier. Emma will then receive 90% replacement for the first $573 of her wages since her regular earnings are above the state average weekly wage. Her additional earnings above that $573 amount would be replaced at a 66% rate. When we combine those two tiers, Emma's benefit amount will total $900. 

When new state PFML programs are implemented, there are several considerations for employers to keep in mind. In Maine employers can opt out of participating in the state program for administration if they decide to offer a private plan option. This can either be self-administered or the employer can purchase a plan through an approved insurance carrier. 

As employers prepare for Maine PFML, they should make the decision as to which plan option is best for their workforce. Many employers also already offer extensive benefit packages that could be used in coordination with the Maine PFML benefits. Examples of these programs might be an existing short-term disability plan or a parental leave policy. It is important to understand how these benefits will be impacted and integrate with the main program so employers should start looking at the internal offerings and determine how they could change based on the Maine PFML. 

Finally with employers who have workers in multiple states and different work locations, adding additional PFML states can be daunting. Employers should consider all their employees work locations, which PFML laws apply, and then start preparing for payroll deductions beginning in January 2025. There are some compliance responsibilities on the employer’s behalf that they will need to consider as the Maine PFML program is implemented. 

Thank you all very much for taking the time to join us today and we hope this information was helpful for you.