The Maine State Chamber of Commerce and Bath Iron Works are challenging a rule for paying into a state law that provides paid family leave to workers in Maine.
In a lawsuit filed in Kennebec Superior Court on Monday, the Chamber and BIW claim that employers who plan to offer private paid family leave will be temporarily forced to pay into a state program their workers will not use.
The Paid Family and Medical Leave Program was created as part of the state budget approved in 2023. It provides Maine workers with up to 12 weeks of paid leave for a variety of family reasons, including a newborn child, aging parents or a family member preparing for deployment.
Starting Jan. 1, employers are required to pay quarterly premiums of up to 1 percent of wages based on the number of people they employ into a state fund that will be used to pay out the family leave benefits starting May 1, 2026.
The rule governing the payment schedule was created by the Maine Department of Labor on Dec. 4, 2024.
The lawsuit says that rule conflicts with the Paid Family and Medical Leave Program, which says employers with an approved private plan are not required to pay into the state fund.
“[C]ertain of MSCC’s members, including BIW, intend to provide their employees with private plans that are the substantial equivalent of the PFML,” the lawsuit says, noting that employers are not allowed to apply for the exemption until April 1, and the exemption would not take effect until the first day of the quarter after it is approved.
In the first quarter of 2025, the lawsuit says, BIW will have paid $620,000, which would not be refundable if the state approves its exemption. Additionally, BIW workers will have paid $620,000 — the other half of the 1 percent contribution — for which they would not receive benefits.
The lawsuit claims the rule for paying into the fund is arbitrary and capricious and should be deemed invalid because it conflicts with the state’s Paid Family and Medical Leave Program. Additionally, the lawsuit says the rule is unconstitutional.
Maine Department of Labor spokesperson Jessica Picard said the department is unable to comment on pending litigation.
