Maine Requires Paid Time Off No Matter The Reason: Will More States Follow Suit?

Written exclusively for ChubbWorks

In 2019, Maine became the first state in the U.S. to require private employers to provide paid leave (to be used for any reason) to employees.

An Act Authorizing Earned Employee Leave mandates that private organizations that employ 10 or more employees for longer than 120 days in a calendar year give an employee one hour of paid leave for every 40 hours worked. The leave may not be limited to sick leave — employees are allowed to use their leave time for any reason.

Employers must pay the rate the employee was earning immediately before taking leave and provide the same benefits provided for other types of paid leave. Taking paid leave may not affect the employee's right to health benefits.

Employees start accruing leave on the first day of work but cannot use it until they have worked for 120 days. Earned leave maxes out at 40 hours per year under the law, which goes into effect on January 01, 2021.

The following employers are exempt: seasonal businesses; those with workers covered by a collective bargaining agreement; those with employees who work for fewer than 120 days; and those with fewer than 10 employees.

Employers that violate the law face up to a $1,000 fine per violation. Steven Silver "Maine Becomes First State to Mandate Paid Leave for Any Reason," (Jun. 06, 2019).

Commentary and Checklist

Although Maine is the first state requiring paid leave that is not limited to sick leave, a number of states and even more jurisdictions have laws requiring paid sick leave. Employers must audit their practices to make sure they are in compliance with state or local laws concerning paid time off.

If you are required to provide paid sick leave, work with your legal counsel to confirm that your policies comply with all aspects of the law. For example, know if paid leave must be accrued or provided in a lump at the beginning of the year, if the amount of leave an employee can take at one time is regulated, and if unused paid leave can or must be rolled over to the next year.

Paid sick leave laws often require employers to allow employees to take time off for the illness of certain family members. Many states allow paid sick leave to be used for "safe" time related to domestic violence, sexual assault, and stalking. Also, allow employees to use paid sick leave for routine medical exams.

Keep in mind that, although federal law does not require employers to provide paid time off, the Family and Medical Leave Act (50 or more employees) does require up to 12 weeks of unpaid leave time for certain reasons. Also, the federal tax reform bill gives a tax credit to employers that provided two to 12 weeks, with at least a 50 percent wage replacement benefit, of paid family and medical leave.

Make sure your leave and attendance policies comply with federal law. Avoid attendances policies that mandate termination if an employee is absent a certain number of days for any reason, as these create exposure.

Even if your state does not require paid leave, providing paid sick and vacation days to your employees is a good idea. Research shows that taking time off improves health and productivity while reducing stress. Therefore, providing paid vacation days and encouraging employees to use them will likely improve performance and reduce health-related expenses.

In addition, paid vacation time is the second-most-important benefit to employees after health care. A "Project: Time Off" survey found that employees whose organizations encourage taking vacation are much happier with their jobs than those who work for organizations that discourage or are ambivalent about taking time off.

Here are some other things to consider, according to the Society for Human Resource Management (SHRM), concerning paid time off:


  • Combined PTO Banks - PTO banks don't differentiate between sick and vacation leave. One study showed a decrease in absenteeism with PTO banks. However, some state and local laws, including those in California and New York City, require employers to provide a certain amount of paid sick leave. As a result, PTO banks could violate state or local laws.
  • Forced Time Off - Some organizations incentivize taking vacations by providing additional funds to be used toward travel or requiring employees to take their vacation days and disconnect from work during that time. Forced time off can help your organization reap the benefits of vacationing employees. Having someone else look over the books when financial employees are required to take vacation also reduces the risk of fraud.
  • Sabbaticals - Some organizations provide extended leave time after a certain number of years of work. Doing so could help you keep your employees long-term. However, make sure to provide sabbaticals in addition to annual leave time to avoid violating any applicable laws.
  • Floating Holidays - Instead giving employees the day off for traditional holidays, such as Christmas or Easter, some employers provide a certain number of paid holidays that can be used on any day. Providing floating holidays may reduce the risk of religious discrimination, but can be tricky because most employers close their offices on nationally-recognized holidays.
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