At the December 16, 2024, Special Meeting, the Town Council elected to cover the employer and employee contributions to the new Maine Paid Family and Medical Leave Act program in the amount of 1% of employee wages from January 1, 2025 through June 30, 2025.  

On December 4, the Maine Department of Labor released its final rules regarding PFML compliance for employers. The Maine legislature passed the PFML Act in October 2023. The State will administer this paid leave program. Employers with 15 or more employees will owe the State a premium of 1% of wages for all eligible employees. Beginning in January 2025, the law allows employers to collect up to 0.5% of wages from employees through payroll deductions each paycheck.

The law has an exemption for public employers with employees covered under collective bargaining agreements. Premiums are only owed to the State when the contract period expires. For Cape Elizabeth, this includes the Police and Public Works bargaining units, whose contracts expire July 1, 2025.

The Town Council’s decision to cover the 1% contribution for the remainder of Fiscal Year 2025 allows time to educate employees on this new law and better understand the long-term effects or changes required to the town’s existing leave plans and policies. In a December 10 Memo to the Town Council, Town Manager Pat Fox lists the cost of the 1% premiums for eligible employees through June 30 as $27,000. “These payments can be absorbed in the current budget due to staff vacancies in multiple departments this year,” Fox writes.

The cost of all Town employee/employer contributions in FY 2026 will be approximately $70,000. Details and cost-share considerations will be discussed and decided upon during the FY 2026 budget development.

For more information:

PFML FAQ