Changes to Maine Employment Laws

2019 has been a busy year for employment law in Maine! The legislative session concluded with multiple new or adapted laws that all Maine employers should be aware of. Many of these laws go into effect on September 19, 2019.

Eaton Peabody’s Employment Practice Group is available to answer your questions, update your company policies and guide you through all of the upcoming changes.

Pay Inquiry Ban

What does it do? The new law, titled “An Act Regarding Pay Equality,” restricts employers from asking job-applicants about their prior pay history. Employers are also restricted from prohibiting employees discussing or disclosing wage information.

What do you need to do? You and your attorney should review all of your application and hiring forms to make sure there are no questions or references to an applicant’s pay history. When interviewing prospective employees and checking references, employers should not ask any questions about an applicant’s current or past salary or rate of pay.

Are there exceptions? Yes. Where state or federal law requires “the disclosure of verification of compensation information” employers may be obligated to ask about salary histories. Additionally, employers may then inquire about pay history after an employee is offered employment including the terms of compensation. If an employee or prospective employee has voluntarily disclosed compensation history information, without any prompting by the employer, the employer may seek to confirm such information prior to an offer of employment.

What are the penalties? Employers may be faced with monetary penalties in the form of fines ranging from $100 to $500. Unlawful inquiries regarding pay history may be used as evidence of unlawful employment discrimination if an employee brings a claim of discrimination to the Maine Human Rights Commission.

Restriction on Non-Competition Agreements

What does it do? “The Act to Promote Keeping Workers in Maine” limits when employers can require employees to sign non-competition agreements. Non-compete agreements will now only be permissible for employees who earn more than 400% of the poverty level. The federal poverty level is adjusted annually, but currently 400% is $48,560 per year.

Employers must give notice that the employer will require the employee to sign a non-compete prior to an offer of employment in the case of new employees and provide the agreement at least three business days before the agreement is to be signed. Moreover, non-compete agreements may not take effect until after one year of employment or six-months after the date of signing, whichever comes later.

After September 19, 2019 non-competes may only be entered into to protect the employer’s trade secrets, confidential information other than trade secrets, or the employer’s goodwill. The law suggests that non-competes should be used to protect interests that could not otherwise be adequately protected by a confidentiality, non-disclosure or non-solicitation agreements.

Additionally, employers may not enter into “restrictive employment agreements” meaning agreements not to solicit or hire another employer’s employees or former employees. These types of “no-hire” provisions have been common in contractor and subcontractor agreements. This separate section of the new law applies to both entering into new agreements and enforcing prior agreements.

What do you need to do? If you plan to enter into a new non-competition agreement, renew, or amend an existing agreement with an employee you should consult with your attorney to ensure the agreement is fully in compliance. You should be sure to give adequate notice of the non-compete to the employee prior to a job offer and provide a copy of the agreement a minimum of three days before you expect the agreement to be signed.

If it is not possible to use a non-compete agreement in your situation, your attorney can work with you to draft strong non-solicitation, confidentiality and non-disclosure agreements to protect your business’s interests.

Does this apply to pre-existing agreements? Not for non-competes. However, if an employer seeks to amend or renew a non-compete with an existing employee, the non-compete must be updated to comply with the law. The new law DOES effect existing restrictive employment agreements, in that employers may not enforce or threaten to enforce such agreements.

What are the penalties? For violations of either the non-competition sections or the restrictive employment agreement sections, employers may be subject to a civil fine of no less than $5,000.

Extended Protections to Pregnant and Nursing Employees

What does it do? The law, “An Act to Protect Pregnant Workers” does not substantially alter the current Maine law, which prohibits employers from treating pregnant workers who are able to work differently than any other worker and suggests that accommodations should be made in the same manner as those made for an employee with a disability or illness. The law essentially reinforces existing law and clarifies that employers must show an undue burden if they wish to avoid providing certain accommodations for pregnant workers or employees with pregnancy-related conditions.

Examples of reasonable accommodations for pregnancy-related conditions contained within in the text of the law include: providing frequent or longer breaks, temporary modifications in schedules, seating or equipment, temporary relief from lifting, temporary transfer to less hazardous or less strenuous work, and accommodations for nursing mothers.

What do you need to do? If you have a pregnant or nursing employee requesting an accommodation and you are unsure of what to do, you should contact your attorney as soon as possible.

What are the penalties? Violations of this statute may be used as a cause of action for employees to bring a claim of sex discrimination to the Maine Human Rights Commission.

Earned Time Off Law – Effective January 1, 2021

What does it do? The bill, titled “An Act Authorizing Earned Employee Leave” requires Employers to provide employees with paid time off to be used for any reason. Employees must begin to accrue paid time off from the start of employment, however employers may restrict use of paid time off until the employee has worked a full 120 days in a one-year period. The law requires that all employees – both part time and full time – earn one hour of paid time off for every forty hours of work, up to forty hours of paid leave per year of employment.

Most notable about the new law is that employers may not restrict the purpose for which earned time off is used. While employers may still maintain vacation or sick leave policies, the law requires that employees be given – at a minimum – one hour of unrestricted paid time off for every forty hours worked.

Where possible, employers may insist that leave be scheduled to prevent undue hardship on the employer’s operations and employees may be required to give reasonable notice of their intent to use leave time absent an emergency situation.

The statute further prohibits cities and towns from enacting paid leave ordinances.

The Department of Labor is likely to draft regulations explaining how to apply some of the gray areas of the law prior to the effective date. Until then, many practical applications of the law are ambiguous. Currently, there is no prohibition on employers requiring that employees use their paid leave in the year it is accrued, meaning employees do not have to allow unused time to “roll over” to the next year, and generally, Maine has allowed employers to adopt a policy that accrued leave is not paid out upon termination. Absent a specific policy stating otherwise, Maine employers are required to pay out unused leave at the time of termination.

Who does it effect? Any employer employing more than ten employees for over 120 days per year will be required to provide all employees with paid time off.

Are there exceptions? Seasonal business are exempt from this rule, meaning businesses that operate for 120 days or less per year. Businesses with less than 10 employees are also exempt. Collective bargaining agreements that are already in effect will not be effected, however collective bargaining agreements entered into or renewed after January 1, 2021, must be at least as generous as the paid leave statute.

What do you need to do? Most businesses will need to revise time off policies before this new law goes into effect. Review your policies and employee handbooks with your attorney to ensure that you are meeting the minimum requirements of the new law or ask your attorney to draft a new policy that ensures you are fully in compliance before January of 2021.

Updates to the Maine Human Rights Act

Chapter 464 – extended protections

The legislature has clarified sections of the Maine Human Rights Act to specify the following information:

  • Protection has been expanded to include not only individuals who are members of a protected class, but to now also protect individuals with a “known relationship or association” with a member of a protected class. This could include the spouse, parent, or other relation to a member of a protected class.
  • The definition of “Assistance Animals” has been expanded to include an animal that has been determined necessary to mitigate the effects of a physical or mental disability by any licensed health care provider with knowledge of the disability-related need for an assistance animal.
  • “Gender Identity” has been added as a specified protected class, including gender-related identity, appearance, mannerisms or other gender-related characteristics of an individual, regardless of the individual’s assigned sex at birth.
  • Public accommodations must make all single-occupancy toilet facilities gender neutral. Restrooms with multiple stalls may remain gender specific. Single-occupancy toilet facilities are defined as “a restroom for use by one user at a time or for family or assisted use and that has an outer door that can be locked by the occupant.”

If you are unsure how these laws apply to your business, or how to integrate the new laws into your existing company policies, contact Eaton Peabody’s experienced Labor and Employment Practice Group as soon as possible!