To kick off the New Year, employers with 11 or more employees working in Maine will need to review their policy related to the handling of accrued yet unused paid vacation at the end of employment.
Maine passed an amendment to Labor Law §626 requiring unused vacation time accrued on and after January 1, 2023, to be paid to employee at the end of employment. Final wages, now including unused, accrued vacation, must be paid to terminated employees no later than the next established payday.
Exceptions in the vacation payout apply to employers with 10 or fewer employees, public employers, and employers with a collective bargaining agreement (CBA) already addressing the payment of vacation pay at termination.
Employers must continue to comply with the requirements around allowable deductions at the end of employment, such as loans or advances against future earnings or wages.
Employers found in violation of this law are liable for the amount of unpaid wages and vacation pay as well as a reasonable rate of interest, liquidated damages equal to twice the amount of those unpaid wages and vacation pay, and the costs of suit, including a reasonable attorney’s fee.
The New Year is a good time to contact your employment attorney for a review of your policies and compliance, particularly in light of recent developments.
Amy Cann is a licensed attorney in Maine and New Hampshire and a member of McLane Middleton’s Employment Law practice group. She can be reached at amy.cann@mclane.com, or by calling (603) 334-6913.