Republican lawmakers are taking steps to make Maine’s new Paid Family and Medical Leave Program voluntary. Currently, all employers and employees are required to participate in the program, but some legislators are looking to change that.

This program, enacted last year as part of a spending bill, has imposed a one percent payroll tax on most working Mainers and their employers to fund paid leave for all employees statewide, with benefits not scheduled to begin until May of 2026.

Mainers began contributing to the program on January 1 of this year, sixteen months ahead of when benefits are first scheduled to become available.

Although businesses are allowed to substitute a qualifying private plan, at least several months worth of non-refundable contributions must be submitted until their applications may be submitted and approved.

This policy has sparked pushback from the Maine State Chamber of Commerce and Bath Iron Works, prompting them to file a joint lawsuit earlier this year.

[REALTED: Bath Iron Works, Maine Chamber Sue State Over Paid Leave Rules]

Sponsored by House Minority Leader Billy Bob Faulkingham (R-Winter Harbor), LD 1273 would make this program entirely voluntary.

To accomplish this, the bill would repeal the existing program and replace it with entirely new legislation establishing an optional paid leave program for businesses with fifty or more employees.

Individual workers would also have the ability to opt into this program if their employer does not choose to offer it.

Participating employees would be guaranteed sixty percent of their average weekly wages while on leave, up to a maximum amount based the cap on wages eligible for social security benefits.

Unlike the current program, employees would only be eligible to take for up to six weeks per year instead of twelve.

Policies would be made available for purchase by January 1, 2027 at the latest.

The Commissioner of Labor would be required to contract with an insurance provider to administer the program after facilitating a competitive bidding process. The request for proposals would need to be issued by January 1 of next year.

In conjunction with repealing and eliminating the existing program, all premiums collected to date would be refunded and any unappropriated funds would be transferred to the General Fund surplus.

Click Here for More Information on LD 1273

Some GOP lawmakers have proposed even more substantial changes to the new mandatory program, introducing legislation that would repeal the current program without replacing it.

Both bills that seek to do this were introduced as emergency legislation, noting that “to stop economic harm to employers and employees, contributions must stop and be refunded to employers and employees as soon as possible.”

Much like LD 1273, these bills would also require that all contributions be refunded and any remaining money be transferred to the General Fund surplus.

On the other hand, Democrat lawmakers have been taking steps to make the existing paid leave program potentially more burdensome on employers.

For example, President of the Senate Mattie Daughtry (D-Cumberland) introduced legislation that would add new penalties and enforcement measures to the program, as well as establish a Bureau of Paid Family and Medical Leave within the Maine Department of Labor (MDOL) to administer it.

Another bill, sponsored by Sen. Mike Tipping (D-Penobscot) and cosponsored by Rep. Amy J. Roeder (D-Bangor), would repeal certain employer protections from the statutory language underlying the program.

The law currently strikes a balance between allowing employers to assert that an employee’s request for leave would constitute an “undue hardship” on their business while still allowing employees an appropriate degree of flexibility.

While employers can claim that a given request for leave would create an undue hardship that cannot be overcome, employees retain the right 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.

Under the proposal introduced by Sen. Tipping and Rep. Roeder, employers would no longer have the ability to make such an objection.

President of the Maine State Chamber of Commerce Patrick Woodcock told The Maine Wire that the organization “would oppose striking that provision unequivocally.”

“I think the intent really was that the Paid Family and Medical Leave Program — for businesses that would be really undermined by a leave at a critical period — would have some ability to negotiate a use of leave that would not cause a challenge for the business,” Woodcock explained.

“I think [the undue hardship provision] was sort of a recognition that if this program is offered, that there be a recognition that this really can be — given the state of the economy — a real hardship for some businesses, but mostly small employers,” he said.