(The Center Square) — As a court battle plays out over Maine’s paid leave law, the state’s business community is backing proposed changes to the new regulations to blunt its impact on employers.
The proposal, which goes before the Legislature’s Committee on Labor on Wednesday for a public hearing, would set a weekly benefit of up to 65% of an employee’s wages, depending on a worker’s compensation and the size of the company. The current benefits are 90% of wages, which business leaders say is putting the squeeze on the state’s employers.
The plan would mandate that employers deduct up to 50% of the cost of a premium from employees’ paychecks, which could also be levied on unionized workers. It mandates that employers can deduct up to 50% of the payroll premium from workers’ pay and requires employees to give “reasonable notice” to their employer if they plan to use paid leave. There are exemptions for workers with sudden illnesses and other emergencies.
Among those pushing for approval of the bill is the Maine Chamber of Commerce, which is expected to testify in support of the legislation during Wednesday’s hearing.
Maine Chamber President Patrick Woodcock told business leaders during a virtual roundtable last week that the proposal would help ease the burden of the paid leave law on employers and ensure the program remains solvent by setting limits on the generous benefits.
The paid leave program was approved in 2023 as part of a state budget signed by Gov. Janet Mills and covers more than 90% of the state’s workforce. Under the program, workers can take up to 12 weeks of paid leave a year, including for the birth of a child, a medical condition or other circumstances.
Workers and businesses with 15 or more employees are required to contribute to the program and split the cost of the new 1% payroll tax, under the rules. The state began collecting the payroll tax to fund the program in January, but the benefits won’t be available until next year.
The Maine Chamber of Commerce and Bath Iron Works filed a lawsuit to block the new regulations, arguing that they require employers to make “irrevocable” payments into the program through the first quarter of 2025, even if they plan to seek an exemption for offering a similar paid leave plan.
Republicans have filed emergency legislation to defund the program, arguing that the payroll tax will hurt workers and employers when many struggle with higher costs and the ongoing pinch of inflation.
