In Maine, small and medium-sized businesses contribute to a huge portion the state’s economic growth. Whether you’re a seasoned employer or a new business owner, understanding what is required of a Maine employer is essential. At Paper Trails, we’re dedicated to ensuring that business owners in Maine are not only aware of their obligations but also equipped with the knowledge they need to create a fair and compliant workplace environment.
In this article, we will explore the key aspects of Maine employment law, including the rights of employees, required benefits, health insurance coverage, wage laws, child labor regulations, and various HR rules. Additionally, we’ll explore important topics such as Maine’s minimum wage, equal pay, whistleblower protections, and more. By the time you finish reading, you should feel confident in knowing how to navigate the requirements of being a Maine employer.
Topics covered in this guide:
What is required of a Maine employer?
When operating a business, there are both federal and state laws that employers must be sure to comply with.
State requirements of Maine employers
Let’s start by diving into some Maine specific requirements. We will discuss federal requirements later on.
Wage laws in Maine
Understanding wage laws is crucial for employers in Maine. Key points to consider include:
Maine’s Minimum Wage: As of January 1st, Maine’s minimum wage is increasing! This rate may be adjusted annually to keep pace with the cost of living.
| Year | Minimum Wage |
|---|---|
| January 1st, 2023 | $13.80/hour |
| January 1st, 2024 | $14.15/hour |
| January 1st, 2025 | $14.65/hour ($15.50 in Portland and Rockland) |
Salary Wage: In Maine, employees must earn a certain amount per week in order to be paid salary and be exempt from overtime pay. Also, remember, these employees must meet certain duty tests in order to be classified as exempt.
| Year | Salary Threshold |
|---|---|
| January 1st, 2023 | $796.17/week |
| January 1st, 2024 | $816.35/week |
| January 1st, 2025 | $845.19/week |
Tipped Minimum Wage: In Maine, employers may use the FICA tip credit on employees that regularly receive tips as part of their job. Tipped employees rates are as follows:
| Year | Tipped Minimum Wage |
|---|---|
| January 1st, 2023 | $6.90/hour |
| January 1st, 2024 | $7.08/hour |
| January 1st, 2025 | $7.33/hour ($7.75 in Portland and Rockland) |
Equal Pay: The Maine Equal Pay Law has recently been expanded to prohibit pay discrimination based on race. Previously, the Maine Equal Pay Law prohibited an employer from discriminating in pay on the basis of sex only. The expansion seeks to lessen the wage gap for those who fall victim to racial discrimination and provides them with further legal support. The new law specifically prohibits employers from discriminating “between employees in the same establishment on the basis of race” by paying wages to any employee at a rate less than the rate at which the employer pays any employee “of another race for comparable work on jobs that have comparable requirements relating to skill, effort and responsibility.”
Child labor laws in Maine
Child labor laws are designed to protect young workers. In Maine, strong restrictions are in place to protect the health, safety, and educational opportunities of minors in the workplace. These laws cover working hours, prohibited occupations, and permits. Some of these include:
Minors under 16 years old
- Work Hours (may work)
- Between 7 a.m. and 7 p.m. during the school year
- Between 7 a.m. and 9 p.m. during summer vacations only
- Not during school hours
Minors 16 and 17 years old
- Work hours (may work)
- After 7 a.m. on a school day
- After 5 a.m. on a non-school day
- Until 10:15 p.m. on a day before a school day
- Until midnight if no school the next day
- Minors under 17 may NOT work during school hours
Other employee rights in Maine
Maine has specific laws in place to protect the rights of employees. These rights encompass a wide range of areas, including:
Anti-discrimination Laws: Employees in Maine are protected against discrimination based on race, color, national origin, sex, pregnancy, religion, disability, and age.
Harassment Prevention: Employers are obligated to create a workplace free from harassment and provide avenues for employees to report such behavior.
Additional HR rules
Maine employers should also be aware of various HR rules, including:
Whistleblower Protections: Maine law protects employees via the whistleblower protection. Employers cannot discharge, threaten, or otherwise discriminate against an employee if that employee:
- Reports a suspected violation of the law or rule of the state or U.S.
- Refuses to carry out directions or assignments that break the law
- Reports a condition or practice that would put at risk the health or safety of that employee
- Participates in an investigation, hearing, or inquiry
- Reports suspected abuse, neglect, or exploitation of children or disabled adults
Rest Breaks: Maine requires employers to give their employees rest breaks. Most employees are only permitted to work for six consecutive hours at a time unless given the opportunity to take at least 30 consecutive minutes of rest.
The rest break requirement doesn’t apply in emergency situations when there is danger to property, life, public safety, or public health. Additionally, this requirement doesn’t apply to places of employment where fewer than three employees are on duty at one time and the nature of the work allows them frequent breaks during their work day.
Payment of Wages: Employers must pay wages at regular intervals of no greater than 16 days. Each payment must include all wages earned to within eight days of the payment date.
Criminal Record: Maine employers are not longer able to ask applicants about criminal history. This applies to asking applicants on an initial application due to employment discrimination. Also, employers are prohibited from stating in job posts that applicants with past criminal history will not be considered for employment. Employers will be able to ask applicants about their criminal history once they are interviewed, have been determined to be qualified for the position without an interview, or if a federal or state law or rule:
- disqualifies an applicant because of the type of criminal conviction and the employer only asks about the disqualifying offenses
- prohibits the employer from hiring a person who has a criminal conviction, and the employer only asks about the types of convictions that would prevent hiring
For an employer to stay compliant, any questions about an applicant’s criminal history should be removed from their applications.
Maine Severance Pay: Employers in Maine with 100+ employees must offer severance pay to affected employees if an employer closes or relocates a facility that has employed 100 or more employees in the preceding 12 months.. The severance for each employee must be paid at a rate of one week’s pay for each year the employee was employed at the facility.
Benefits rules for Maine employers
Maine employers are required to provide certain benefits to their employees, including:
Workers’ Compensation: Public and private employers must have workers’ compensation insurance to cover employees’ work-related injuries or illnesses.
Unemployment Compensation: Employers must contribute to the state’s unemployment compensation program, which provides financial support to eligible employees who lose their jobs through no fault of their own.
Earned Leave Requirements: Maine employers with 10 or more employees must allow employees to accrue paid time off. Employees must accrue at least 1 hour for every 40 hours worked. Read more about Maine’s Earned Paid Leave here.
Vacation Time Payout: Maine employers must payout any unused, accrued vacation time to employees regardless of the reason of separation from employment. This law also applies to businesses with 10 or more employees.
MERIT: Maine is implementing a retirement program in the state. The Maine Retirement Investment Trust (MERIT) requires covered employers to offer an employer-sponsored retirement plan to their employees. If a covered employer does not offer a retirement plan, they must provide their employees the option to contribute to a state-sponsored retirement plan. Read the full details of the program here.
Paid Family & Medical Leave: Maine is implementing a paid family and medical leave program starting on January 1st, 2025. Employees that earn wages in Maine must contribute 0.5% payroll tax to help fund this program. Employers with 15 or more employees must also contribute a 0.5% payroll tax. Learn more about Maine PFML here.
Health Insurance Coverage: While Maine law doesn’t mandate employers to provide health insurance, many employers offer this benefit to attract and retain talent. Federally, employers with 50+ employees ARE required to offer affordable health insurance to employees.
Federal requirements of Maine employers
Now that we know the specific Maine requirements, let’s take a look at what is required at the federal level for all employers. These apply to all businesses, regardless of the state in which they operate.
Payroll taxes
The first things employers must be aware of is their payroll tax responsibilities. There are two things employers must do in terms of taxes.
- deduct a portion of employees pay to pay the tax liability on their behalf. This includes:
- federal and state income tax based on your employees W4 form.
- the employee portion of social security and Medicare taxes.
- pay the company share of payroll taxes on each employee. This includes:
Employee classifications and overtime
Next, employers must know how to classify their employees correctly. Employees must either be classified as a W-2 employee or a 1099 independent contractor. For those employees that are W-2 employees, employers must decide whether the employees will be non-exempt or exempt employees. Differences between these two types of employees can be found here.
For those employees that are classified as non-exempt, federal requirements state that employees must receive overtime pay for hours worked over 40 in a workweek at a rate of 1.5 times their regular rates of pay. Furthermore, employees who work multiple positions with multiple pay rates must be paid using the blended overtime method.
Federal labor laws
There are certain federal labor laws that must be followed depending on the size of an organization. Labor law posters must be displayed in the workplace in an area visible to employees. You can find which laws apply correspond to which employer by size below:
- Fair Labor Standards Act (FLSA)
- Immigration Reform and Control Act (IRCA)
- Equal Pay Act
- Civil Right Act & Title VI
- Employment Retirement Income Security Act (ERISA)
- Occupational Safety and Health Act (OSHA)
- Health Insurance Portability and Accountability Act (HIPAA)
- Uniformed Services Employment and Reemployment Right Act (USERRA)
- National Labor Relations Act (NLRA)
- Employee Polygraph Protection Act (EPPA)
Conclusion
In conclusion, running a business in Maine comes with certain responsibilities and obligations. Ensuring that you are well-informed about these rules is essential and will help you navigate the complex landscape of employment law in Maine.
At Paper Trails, we are committed to helping business owners like you stay compliant with the law. By understanding and adhering to the requirements for Maine employers, you can create a thriving and legally sound workplace that benefits both your business and your workforce. Contact us here if you are looking for payroll and HR help in Maine.