Small Business Funding

The Maine State Chamber of Commerce and Bath Iron Works have filed a civil lawsuit against the Maine Department of Labor and its commissioner in connection with the DOL’s recently approved rules governing the state’s Paid Family and Medical Leave program.The lawsuit was filed Monday in Kennebec County Superior Court and claims the PFML rules harm Maine employers that will offer a private family and medical leave plan, such as Bath Iron Works and other Chamber of Commerce members.On Jan. 1, any employer with at least one Maine-based employee began payroll withholdings to go toward the PFML Fund. The fund will accumulate contributions for 16 months and benefits will start being paid to people who are eligible for PFML starting on May 1, 2026.Employers with 15 or more employees will contribute 1% of wages to the PFML Fund, and they may deduct up to half of the contribution from their employees’ wages. Employers with fewer than 15 employees will contribute 0.5% of wages, but those employers may deduct that entire amount from their employees’ wages. All employers will begin reporting wages from the first quarter on April 1 and the first premium payments are due on April 30.The state, however, does allow employers to provide a private paid leave plan to their employees that offers rights, protections and benefits that are substantially equivalent to those provided by the Maine PFML program.Employers with approved private plans will not be required to make payments to the PFML Fund and their employees will not pay double premiums, but those employees will lose their Maine PFML eligibility.In the lawsuit, the Maine Chamber of Commerce said some of its members, including Bath Iron Works, intend to provide their employees with private plans that are the substantial equivalent of the PFML.The Chamber of Commerce and BIW claim that the current PFML rules prohibit employers applying for exemption until April 1 while simultaneously requiring that applications be submitted at least 30 days before the end of the quarter for the exemption to take effect.Thus, the plaintiffs argue it is impossible for employers who plan on using private plans to obtain approval for the first quarter and forces them to pay into a program that their employees will not be eligible to receive benefits from.The Chamber of Commerce and BIW also claim the PFML rules do not state how long the Department of Labor can take to review applications from employers planning to use private plans, as they do not establish any deadline by which the DOL must take action on such applications.According to the lawsuit, the PFML rules require employers to pay premiums through and until the date the Department of Labor grants their applications for substitution of a private plan, and those payments are non-refundable.Maine’s PFML program will provide eligible individuals with up to 12 weeks of paid leave for family or medical reasons, to deal with the transition of a family member’s pending military deployment or to stay safe after abuse or violence.Previous coverage: