Labor Policy Round-Up: Carry-over bills dominate the Second Session’s workload

The Joint Standing Committee on Labor and Housing spent a large portion of the Second Session dealing with bills left over from the First Session. While that may not sound unusual, it was worth the wait, given the outcomes on these issues of significance to the business community. In order of importance, they are:

• LD 607, An Act To Restore Overtime Protections for Maine Workers, sponsored by Rep. Rachel Talbot Ross (D-Portland), sought to change the current monetary threshold difference between salaried employees and hourly employees in the state of Maine. As amended in committee earlier this year, the bill would have increased the salary threshold from its current amount of $38,250 to more than $57,000 by 2024. The exact figure was difficult to determine, as the bill proposed changing the multiplier tied to the minimum wage in existing Maine law and did not count adjustments to the minimum wage annually by the Consumer Price Index (CPI).
  The Maine State Chamber and more than 40 other business associations from around the state formed a coalition in opposition to LD 607. In addition, a vigorous grassroots outreach effort was undertaken by the Maine State Chamber and others to alert legislators to the significant problems with the bill and its impact on Maine businesses, employees, and the economy. That outreach effort was successful, as at a subsequent work session in the Labor committee, Rep. Talbot Ross offered a completely re-drafted version of the bill – the focus of which was to direct the Maine Department of Labor to develop a comprehensive educational campaign to ensure that Maine’s regulated community fully understands the laws regarding the payment of overtime to Maine workers. This resolve replaced her bill and represented a marked improvement over the original language. The bill passed unanimously in the Labor committee, was approved by the full legislature, and has become law.
  

• LD 225, An Act Regarding the Treatment of Vacation Time upon the Cessation of Employment, sponsored by Rep. Amy Roeder (D-Bangor), will require employers to pay employees for unused vacation time at the end of employment. Because of the broad language of the original bill, the Maine State Chamber opposed it in 2021. As drafted, it would have included Maine’s recent Earned Pay Leave (EPL) law, which became effective on January 1, 2021. That law specifically indicated that cash out of such leave is solely at the discretion of the employer. In addition, the Maine State Chamber had concerns with the financial impact on small businesses and on workers.
  Under existing Maine law, any employer that has a policy which indicates that upon cessation of employment any unused vacation time will be cashed out, must do so, as that earned time has the same status as wages earned. This has been a longstanding human resources practice, and in fact, nearly all Maine employers do “cash out” unused vacation time, but not sick time.
  In recent years, more employers have moved to utilizing Paid Time Off (PTO), which gives a worker a block of “unassigned” time to use as they wish for sick or vacation purposes. Additionally, employers have adopted a “use it or lose it” policy, which requires all vacation time to be used in a year or risk losing it. In other words, there are a variety of vacation time options for both employers and employees.
  LD 225 does not necessarily impede with those options. As negotiated, the bill does require employers with more than 10 employees to cash out any unused vacation time, only if the employee separates from the employer. The law is prospective and applies to any accrued time earned after January 1, 2023. The cash-out provision does not apply to PTO time or to time under the EPL law. Employers are still entitled to cap the amount of vacation time an employee may earn, to adopt a “lose it or lose it” policy, and to allow or prohibit the roll -over of earned vacation time.
  As with LD 607, the bill was approved by the full Labor committee, passed in the House and Senate, and signed by Governor Janet Mills.
  

• LD 1952, Resolve, To Reestablish the Commission To Develop a Paid Family and Medical Leave Benefits Program, sponsored by Sen. Matthea Daughtry (D-Cumberland), will continue the work begun last fall by the Commission to Develop a Paid Family Medical Leave Benefits Program. The commission conducted listening sessions throughout late fall and winter and heard from both advocates and the business community, including the Maine State Chamber of Commerce.
  Part of the charge given to the commission is to engage an actuarial firm to conduct an analysis on the feasibility of developing such a program, to determine who would qualify and for what purpose, to ascertain how to pay for it and who should pay, and to establish what benefits it would offer and its uptake rates. The resolve, which was unanimously approved and has become law, will extend the meetings and work of the commission through this year, allowing for the engagement of Milliman to conduct the actuarial analysis, and have a report for the 131st Legislature in January 2023.
  Maine businesses should be aware and prepared; this will be a topline issue in the next session. Without question the Labor and Housing committee and the full legislature will debate the merits of Maine going on its own to offer paid family medical leave benefits. The remaining questions include how it will be funded and by whom, and what will be the impact on Maine’s already struggling workforce shortage.

• LD 965, An Act Concerning NonDisclosure Agreements in Employment, sponsored by Rep. Thom Harnett (D-Gardiner), was a concept originally proposed in the 129th Legislature but died on the Appropriations table when session abruptly ended due to the pandemic. As LD 965, the bill will significantly restrict the right of an employer to use non-disclosure agreements (NDAs), both with prospective employees at hire or in cases where settlements for discrimination claims contained an NDA, unless the aggrieved party agreed to the NDA as part of the settlement. However, even in those cases, the bill goes on to render most NDAs as unenforceable, because they cannot limit a victim’s right to provide testimony or statements to the Maine Human Rights Commission or the Maine Department of Labor.
  Maine employers and employees operate in a different sphere for the most part, and often the NDA is a reasonable tool for reaching a compromise and resolving differences, a highly valued policy goal in almost every setting. Not all claims are clear cut, and there can be behavior issues or work performance shortcomings on the part of the employee, the supervisor, or even a co-worker who is not part of the claim. Perspectives on what happened can be honestly different. In its testimony before the committee in 2021, the Maine State Chamber asked the committee if it was appropriate public policy for the legislature to be creating impediments to legitimate dispute resolution. Because in the end, resolution of disputes is a good thing, and it is easier to resolve matters, often for everyone, if there is confidentiality.
  LD 965 has had a rather tortured legislative history. After being carried over to this session, it was one of the last bills to be taken up by both the Labor committee and the full legislature. The bill had reached Governor Mills’ desk, and under threat of veto, was recalled for further amending. The Maine Chamber remains concerned that the restricting or weakening of the use of NDAs in certain circumstances will only extend litigation and decrease voluntary settlements. This drives up costs for both parties and can add to the stress of a victim of discrimination. The bill was amended, but not materially, and it became law without the Governor’s signature.

• LD 1338, An Act To Prohibit Employers from Retaliating against the Use of Earned Paid Leave, sponsored by Rep. Rebecca Millett (D-Cape Elizabeth), was a carryover bill from the first session. As originally drafted, it sought to repeal sections of law related to “prohibiting acts and judicial enforcement … governing family medical leave practices.” It essentially allowed an employee to file a complaint based on any violation of Chapter 7 with the Maine Department of Labor (DOL) or with the courts – including Maine’s new Earned Paid Leave law enacted in January of this year – something both the existing law and rules developed by the Maine DOL do not allow. The Maine State Chamber strongly opposed the original bill, and the Mills administration expressed concerns as well. Ultimately, the bill was amended to prohibit an employer from “retaliating” against an employee for exercising their right to use Maine’s EPL law – even though “retaliating” is undefined and could well include a legitimate dispute over use of the leave. However, there is zero evidence this is an ongoing problem, and as noted above, it was determined not to place such a prohibition in law. Instead, the Maine Department of Labor is tasked with enforcement through rulemaking.
  The bill as amended had a fiscal note, and at the end of the First Session, it was placed on the Appropriations table. In the closing days of the Second Session, it was removed from the table, and the fiscal note was addressed. The bill was sent to the Governor for final disposition, where it was vetoed by the Governor as unnecessary, and her veto was overwhelmingly sustained by the House. The Maine State Chamber remains opposed to the bill.

• LD 616, An Act To Increase Accountability for Wage Violation, sponsored by Rep. Ben Collings (D-Portland), increased the fines for wage violations in the state of Maine. The first violation will increase from $100 to $500, and each subsequent violation will increase to at least $500 but no more than $2,500. The bill, however, does not differentiate between a mistake and a willful wage violation. LD 616 also suggests that employers are committing violations so regularly that such an update to legislation is necessary.
  The bill passed from the committee and was approved by a majority of the legislature. However, because it has fiscal implications, it landed on the Appropriations table at the end of the First Session, and died there at the end of the Second Session.
  

There are many things that made the 130th Legislature challenging and different from any other session. One was the virtual nature of the committee process. Participating in public hearings and work sessions were certainly part of that challenge. Another was the contentiousness of both the legislature itself and the legislation brought forth. It was unfortunate that so much time was spent in the Labor and Housing committee considering bills that pitted employees against employers, when so many businesses and business owners made every possible effort to take care of and work with their workers during the pandemic. Looking at the various proposals outlined in this article one would believe the exact opposite was true.

While it is unclear whether any of the unsuccessful proposals from this session will turn up again next year, it is virtually certain that the paid family medical leave benefits proposal will return. The workplace is changing in ways that were not imaginable before the pandemic. How that translates into legislation and new laws is unclear. We know there will be new and unexpected challenges in returning workers to the workplace, but what new bills might result from that return is unknown. We also know that, no matter the legislative challenge, the Maine State Chamber’s Advocacy team will be there making sure your voice is heard and your concerns are voiced. For questions or additional information, please contact Peter Gore by calling (207) 623-4568, ext. 107, or by emailing [email protected].