The Joint Standing Committee on Labor and Housing took action on two bills and tabled another at their work session on Wednesday, April 14, 2021.
As they have for practically every bill have taken up so far, the Labor committee divided along party lines. The committee voted 8-5 “ought to pass as amended” on LD 616, An Act Increase Accountability for Wage Violations, sponsored by Rep. Benjamin Collings (D-Portland). As drafted, LD 616 represents the final position of an exact same proposal that was defeated last year at the end of the 129th Legislature. The bill proposes to increase fines for wage-and-hour violations significantly – from $100 to $500 – and implements a new fine for each subsequent violation – up to an additional $500, not to exceed $2500 fine for each subsequent violation. In addition, the employer would be subject to an additional fine paid to the employee of twice the amount of unpaid wages and attorney’s fees.
The Maine State Chamber has consistently opposed the bill because it fails to delineate between a mistake and an act of willful maliciousness. In addition, as constructed, LD 616 is ambiguous, failing to clarify how the “subsequent violation” section would work. For instance, if every paycheck of every employee in the company contained an error of withholding, is the initial mistake be subject to the initial $500 fine and each subsequent error then subject to an additional $500 or even $2,500 penalty? This bill as approved on April 14 still does not make that clear, but it could certainly be interpreted that way. Therefore, as with last session’s version of this proposal, the committee did not clarify this important point before sending it to the full legislature for consideration.
At the request of the bill’s sponsor, Rep. Rachel Talbot Ross (D-Portland), LD 607, An Act to Restore Overtime Protections to Maine Workers, the committee voted to request the bill be carried over to the Second Regular Session of the 130th legislature in 2022. The request was made, again, along party lines – with Democrats supporting and Republicans opposing.
Maine State Chamber members may remember that LD 607 is one of the more important bills of this legislative session for Maine businesses. As drafted, the bill proposes increasing the overtime threshold by adjusting the multiplier that is currently part of Maine’s wage-and-hour law – by more than $20,000 over a three-year period, finally landing somewhere above $55,000 by 2024. Referred to as the “overtime” or “salaried” threshold, this is the monetary dividing line between employees who are considered salaried/exempt for the purposes of overtime pay and those who are hourly workers and therefore eligible for overtime pay after working 40 hours in a week.
The Maine State Chamber opposed the bill in a public hearing last month and continues to strongly oppose the bill going forward – this year or next.
Employment at Will…
Lastly, the committee voted to table for further consideration, LD 553, An Act to End At-Will Employment, sponsored by Rep. Michael Sylvester (D-Portland). As presented in last month’s public hearing, LD 553 would restructure Maine’s current workplace law regarding employee discharges. It eliminates the current limited or regulated employment-at-will status Maine businesses currently operate under and replaces it with a requirement of “just cause” when terminating an employer/employee relationship.
The proposed legislation also seeks impose and then regulate the employer’s discipline process by requiring a three-step disciplinary process consisting of a verbal warning, a written warning, and a final written warning. With each step, even the “verbal” warning, the employer must also produce a written document detailing the basis for the warning. With the “final written warning,” the employer must also state in writing that (a) any further instance of the employee’s conduct or violation of policy identified in documentation will lead to the immediate termination of the employee’s employment, (b) require the employee to sign a copy of the final written warning, and (c) state that the failure of the employee to sign the final written warning is considered a violation of the progressive discipline policy. Failure to follow this process to the letter would expose the business to civil litigation with damages and legal fees.
The Maine State Chamber strongly opposed the bill and continues to do so in any form. Despite problems pointed to by the committee’s policy analyst, the business community, and the Maine Department of Labor, the committee’s Democrats appear interested in trying to find a way to move the issue ahead by focusing on disciplinary issues of “trust, privacy, confidentiality, and safety.” What this means, or how it could in any way be implemented juxtaposed to “for cause discipline,” is unclear. Regardless, the Maine State Chamber will oppose LD 553.
Perhaps above all others, this session is proving to be a challenge before the Labor committee. It appears that the concerns of the business community are routinely pushed aside or ignored by a majority on the committee. Furthermore, the process has lacked access and input from stakeholders, most pronounced from the business side. More disappointing, every issue before the Labor committee has become highly partisan, with little attempt to reach any type of compromise on any issue. There are several significant, important bills that remain before the committee in the weeks to come. Final decisions on those bills will have a real and critical impact on Maine businesses – employers who continue to struggle just to survive because of the pandemic and its economic fallout. However, any final committee action on these bills remains unknown and unclear.
For questions or additional information, please contact Peter Gore by calling (207) 623-4568, ext. 107, or by emailing email@example.com.