Legislative lowdown: Maine’s high court upholds paid family leave program

A program providing paid family and medical leave (PFML) to Maine-based workers has been upheld by the state’s Supreme Court.

Bath Iron Works, a Navy ship manufacturer based in Bath, Maine, along with the Maine State Chamber of Commerce, sued the state’s Department of Labor (MDOL) in January. The Maine Supreme Court sided with the Department of Labor in an Aug. 26 opinion, allowing the rules for implementing the state’s PFML program to stand.

The plaintiffs argued Bath Iron Works shouldn’t be subject to mandatory quarterly taxes that started in January to fund the program, as it intends to offer a private leave program in lieu of the state-funded one. While the law establishing PFML says that employers with private plans approved by the state may be exempt from this tax, the MDOL didn’t start reviewing such plans until April. This means that in the interim, Bath Iron Works is still required to pay into the state’s PFML program.

The plaintiffs also argued the rules for implementing the state-sponsored program constitute “a taking of private property for public use” under Maine’s constitution. The Maine Supreme Court disagreed with both of these arguments.

What this means for Maine employers. The decision means the MDOL will continue to collect payroll contributions from employers in the state for PFML, with workers entitled to start receiving benefits in May 2026. Contribution rates vary depending on the size of the employer; businesses that employ 15 or more Maine employees must contribute a premium equivalent to 1% of workers’ wages, and have the option to withhold half of that premium from workers’ paychecks.

Maine businesses that intend to provide leave benefits through a private plan, rather than the state’s program, may apply to be exempt from the payroll tax through the state’s paid leave contributions portal. The substitute plan must meet a number of criteria to qualify for this exemption, providing benefits that are “substantially equivalent” to Maine’s PFML plan.

Most Maine workers will be eligible to take up to 12 weeks of paid leave when the program is fully rolled out next year, as the law applies to employers of any size, and extends to self-employed workers, as well. The leave can be used for a variety of reasons, including bonding with a child following a birth, fostering or adoption, as well as caring for oneself or a family member dealing with medical needs.

Next up…Minnesota, Maryland. In recent years, paid leave programs have been enacted in 13 states and Washington, D.C. Minnesota’s PFML program, like Maine’s, faced pushback from some members of the business community, but is nevertheless slated to launch on Jan. 1 of next year.

Meanwhile, the start of a paid family leave program in Maryland has been delayed several times, most recently due to concerns about changes affecting the federal workforce. Employers and workers are now expected to begin contributing to that program in January 2027.

Even in states that subsidize paid leave, workers still rely primarily on their employer to navigate information about these benefits, HR Brew previously reported. In light of this, HR leaders can educate themselves about new laws coming into effect, as well as what benefits employees are entitled to under these programs. They can also foster a culture where workers are encouraged to take time off to bond with a child, for example, as research shows some parents leave the benefit on the table due to fears of job loss or career setbacks.