Recently, Governor Janet Mills of Maine signed H.P. 160 - L.D. 225, "An Act Regarding the Treatment of Vacation Time Upon the Cessation of Employment," which amends Maine's final wage statute to require the payout of unused, accrued vacation time upon separation for Maine employees (the "Act"). This amendment makes Maine one of a small number of states mandating the payment of unused, accrued vacation upon termination. While the Act goes into effect on July 19, 2022, Maine employers have until January 1, 2023 to comply with the requirements of the amended Act.

Here are some of the important highlights:

• Covered Employers: The amended Act applies to all private employers with 10 or more employees. The amended Act does not state whether the 10 or more employees threshold counts only those employees within the state of Maine or all employees nationwide. The Act does not apply to public employers within the state.
• Definition of "Vacation": The amended Act does not define "vacation" time. Therefore, it is not apparent from the statute if it will apply to general paid time off (PTO) policies.
• Penalties: The amended Act treats violations for unpaid accrued vacation time the same as for other unpaid wages. Thus, violations of the Act could result in payment of the unpaid accrued vacation time, as well as liquidated damages equal to double the amount of unpaid accrued vacation time, and attorney's fees and costs.
• CBAs: If the employee's employment is governed by a collective...

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