An Act to Make Paid Family and Medical Leave Voluntary
LD 1273 would repeal Maine’s existing mandatory paid family and medical leave program and replace it with a voluntary system. The bill states that the current program, which began collecting contributions in 2025, would be made optional for employers and would apply only to employers with 50 or more employees. It also directs the Department of Labor to stop collecting mandatory contributions, refund amounts already paid by employers and self-employed individuals, and return any employee payroll deductions to those employees through wages. In addition, it would move unappropriated funds from the program’s special revenue account into the General Fund surplus.
The bill then creates a new voluntary paid family and medical leave insurance program to be administered through a competitively bid contract with a private insurance company authorized to do business in Maine. Under the proposal, employers with 50 or more employees could choose to offer coverage, and individual workers whose employers do not participate could also buy coverage through a purchasing pool. The program would provide up to six weeks of family leave and six weeks of medical leave, with a combined annual cap of six weeks, and benefits would equal 60% of a covered individual’s average weekly wage, subject to a federal wage cap. The Commissioner of Labor would be required to issue a request for proposals by January 1, 2026, and make coverage available by January 1, 2027.
If enacted, the bill would substantially amend Title 26, chapter 7, subchapter 6-C by repealing the mandatory state-run paid family and medical leave structure and replacing it with a new voluntary subchapter 6-D framework. It would also affect employer payroll practices, refund obligations, state fund balances, and the Department of Labor’s administrative responsibilities. The bill includes retroactive language tied to October 25, 2023, and emergency language intended to make the changes effective immediately.
The overall sentiment reflected in the voting history was negative toward the bill. The House and Senate both accepted majority ought-not-to-pass reports, indicating that a majority of legislators opposed advancing the proposal. The recorded votes suggest the bill drew enough support to prompt debate, but not enough to overcome the committee recommendation against it.
The main point of contention is the policy shift from a mandatory paid family and medical leave program to a voluntary one. Supporters appear to favor employer choice, refunds of contributions, and a private-insurance model, while opponents likely object to repealing a newly established statewide benefit and undoing a program designed to provide broad worker coverage. The bill also raises practical and fiscal concerns about refunding contributions, transferring program funds to the General Fund, and changing the scope of coverage to employers with 50 or more employees and voluntary individual purchasers.
The bill would repeal and replace major portions of Maine’s paid family and medical leave statutes in Title 26, chapter 7, subchapter 6-C, shifting the program from mandatory participation to a voluntary insurance model under a new subchapter 6-D. It would require refunds of contributions already collected, require employers to return employee payroll deductions, and transfer remaining unappropriated program funds to the General Fund. It would also create new duties for the Department of Labor and the Commissioner of Labor to procure a private insurer, set program parameters, and oversee implementation of the voluntary coverage option.
The voting history indicates that the bill was generally viewed unfavorably by the Legislature. Both chambers accepted majority ought-not-to-pass reports, showing that the prevailing sentiment was against repealing the existing paid family and medical leave framework and against moving to a voluntary model. The recorded votes suggest the proposal had some support, but not enough to overcome the majority opposition.
The central dispute is whether paid family and medical leave should remain a mandatory statewide benefit or become optional for employers and individual workers. Supporters of the bill likely emphasize employer flexibility, reduced mandatory payroll costs, and refunds of collected contributions, while opponents likely argue that making the program voluntary would weaken access to leave benefits and undermine the policy goals of the existing law. Additional contention concerns the bill’s retroactive changes, the required refunds, and the transfer of program funds to the General Fund, all of which could affect employers, employees, and the state budget.