MAINE: An Introduction to Labor & Employment

Maine Labor and Employment Overview 

By Peter Herzog, Shiloh Theberge and Tara Walker, Bernstein Shur

Introduction  

Maine courts and lawmakers have been hard at work over the past several years developing a robust and sophisticated body of law which all employers, whether they are physically based in Maine, have satellite operations in Maine, or employ remote personnel in Maine, must be aware of. The COVID-19 pandemic has created additional complex issues regarding the rights of employees and obligations of employers, not only with respect to employment law compliance, but with respect to the health, safety and protection of the public at large. Maine has been quick to respond to these challenges with laws and regulations that are rapidly developing and constantly evolving.

2019 Law Regarding Restrictive Covenants 

On June 28, 2019, Maine Governor Janet Mills signed into law 'An Act to Promote Keeping Workers in Maine,' which significantly limits the use of restrictive covenants between employers and employees, as well as between businesses.

The new law defines noncompete agreements as those that prohibit “an employee or prospective employee from working in the same or similar profession or in a specified geographic area for a defined period of time following termination of employment.” Among other things, under this law, employers can no longer enforce noncompete agreements with employees earning less than 400% of the federal poverty level ($49,960 for 2020).

Employers doing business in Maine must also follow strict advance notice rules. Before making an offer of employment, employers must notify an applicant that they will be asked to sign a noncompete agreement. The applicant must receive an actual copy of the agreement at least three business days before being asked to sign it, allowing the applicant time to review, discuss with counsel and potentially negotiate the terms of the agreement prior to signing. Finally, with very limited exceptions, noncompete agreements cannot take effect until one year after the employee is hired or six months after the employee signs the agreement, whichever is later. This means most employees will now have a one-year grace period to leave a new job before a noncompete agreement becomes binding, making enforceable non-disclosure and non-solicitation agreements critical.

In addition, with respect to restrictive covenants between two businesses, Maine has also adopted a new law targeting anti-poaching agreements. These types of agreements exist where two companies agree not to recruit or hire away each other’s employees. Notwithstanding the antitrust issues that arise with these types of agreements, the new law categorically prohibits these types of agreements as a matter of state law. Accordingly, under Maine law, these types of agreements are no longer enforceable.

Maine’s Groundbreaking Earned Paid Leave Law 

In 2019, Maine became the first state in the nation to require employers to pay up to 40 hours per year in earned leave for any reason when the Legislature passed the Maine Earned Paid Leave law (MEPL). MEPL went into effect on January 1, 2021.

In short, MEPL provides that any employer with more than 10 employees (whether part time or full time) for more than 120 days in any calendar year, must allow employees to accrue paid leave at a rate of one hour for every 40 hours worked.

MEPL also requires the following:

• Employers do not have to allow employees to begin using the leave until after 120 days of employment, counting the time the employee was employed prior to January 1, 2021.
• Employers may require at least 4 weeks’ notice of an intent to use the leave unless it is for an emergency or unforeseen reason.
• Employees may carry over unused, earned leave time, but are only eligible to accrue and use a maximum of 40 hours in any given year, including the time carried over from the prior year.
• Whether employees must be paid out for unused, earned leave time on termination of employment is governed by the employer’s policy on other kinds of vacation, sick or personal leave.
• Seasonal employees as defined by Maine’s Employment Security Act are specifically exempted from MEPL.
• Employers are required to post this updated workplace posting, reflecting the requirements of MEPL.
• MEPL provides that unless the employer tracks actual hours worked, salaried employees will be deemed to work 40 hours per week. However, the Maine Department of Labor (MDOL) has stated that employers may instead use the IRS hours equivalence or another standard for accrual by exempt employees if the employee does not dispute the standard.

Many employers have asked whether they need to do anything if their voluntary paid time off or leave policy is more generous than the 40 hours per year required by MEPL. The short answer is yes. Employers should, at the very least, review their current policies with employment counsel to ensure they comply with MEPL’s various requirements relating to accrual, notice and carryover, among other things.

Employers may be subject to fines if the MDOL determines that they are not in compliance with MEPL. In addition, the MDOL has pointed out that employees who are retaliated against for exercising their rights to MEPL may have a claim under the Maine Whistleblowers’ Protection Act. As such, employers should ensure that they have a policy regarding MEPL leave and are providing and tracking use of MEPL leave.

The COVID-19 Pandemic in Maine 

Maine responded swiftly and decisively to the outbreak of the COVID-19 pandemic with a series of Executive Orders issued by Governor Nancy Mills closing all but essential businesses in March of 2020 and reopening slowly through the following summer. For businesses seeking to open or operate in Maine, there are a few requirements and issues to consider.

First, the Maine Department of Economic and Community Development (“DECD”) created a series of industry-specific checklists for COVID-19 safety protocols. These checklists include guidance for religious services, public buildings, summer camps, performing arts venues, museums, gyms, fitness centers, healthcare or personal services businesses, among many others. For those who did not fit any of these specific areas, the DECD also created a general business checklist for reopening. As businesses began to reopen in the summer months of 2020, DECD required those entities to register on the DECD website and to indicate that they were complying with the guidance in the checklists. Businesses who had done so could then download and post a now familiar sign in any shop window, indicating that they were aware of and compliant with the safety guidelines. Businesses who did not follow the safety guidelines, or in some cases flouted them, were subject to fines of up to $600 per reported occurrence.

Second, like most other states, Maine enacted restrictions for out-of-state travelers entering the state. With some evolving exceptions (for New Hampshire, Vermont, Massachusetts, New York and New Jersey at various times), any individual except for some limited essential workers were required to quarantine for 14 days upon entry into Maine, which has been reduced to 10 days with no symptoms. With greater resources for testing, this was amended to allow those entering the state to avoid quarantine requirements with a negative COVID-19 test result no more than 72 hours before entering the state. Any businesses coming to Maine should understand the most recent Executive Orders to be aware of travel restrictions for those leaving and coming into Maine.

Third, the other major consideration for employers in the pandemic is the potential for liability for workplace exposures to COVID-19 and, conversely, whether to mandate COVID-19 vaccines for employees or visitors. With respect to both, Maine law presents fewer risks than most other states. Although many other states’ workers’ compensation statutes create exceptions for which employers could be liable for workplace injuries for intentional or grossly negligent conduct, Maine’s Worker Compensation Act has no such exception. Similarly, the vehicle through which employees in other states have challenged vaccine mandates - a public policy exception to the at-will employment doctrine - has not been recognized in Maine to date. These conditions make Maine a more favorable state than others for pandemic liability purposes.