Maine Nonprofit Law E-Bulletin

September 8, 2023

In this issue:

In this Issue:

·        Paid Family and Medical Leave Coming to Maine Nonprofit Employers

·        Maine Charitable Immunity Law No Longer Applies to Sexual Assault Against Minors

·        Increased Federal Overtime Threshold Coming (Definitely Maybe)

Paid Family and Medical Leave Coming to Maine Nonprofit Employers

While you were off at the beach or in the woods in the middle of July, the Maine Legislature passed one of the most thoughtful and comprehensive paid family and medical leave bills of any state to date. Huzzah! Now, what’s it all mean for Maine nonprofits?

Here’s a basic overview of the new law. If you want to look under the hood at the 21 pages of statutory language, have at it, but it’s not for the faint of heart. In a nutshell, the law establishes up to12 weeks of paid family and/or medical leave per year to all eligible employees. Paid family and medical leave will not come directly from the employer, but rather from a state fund. The fund will be paid for by a 1% payroll tax, split evenly between the employer and employee.

As you’ll see, there’s no exemption for nonprofit organizations; they are treated just like any other employer. That means that all nonprofit employers of Maine-based employees will have to take affirmative steps to comply with the law. Employers with fewer than 15 employees are exempt from having to make employer contributions, but they will still have to withhold the employee’s contribution.

The statute is complex, and the Maine Department of Labor is tasked with issuing rules by January 2025, which is also when employers will have to begin the payroll tax withholding. The rest of the law doesn’t take effect until May 2026.

So what should Maine nonprofit employers be doing in the meantime? Well, there’s not a whole lot to do until January 2025, when the new rules will be issued. Hopefully, setting up the withholdings will be a simple process, especially if a payroll company is involved. Nonprofits that have existing unpaid or paid family and medical leave policies will want to update or replace those policies at some point in 2025, mostly likely by simply referring to the new law.

Meanwhile, employers with 50 or more employees are already subject to the federal Family and Medical Leave Act of 1993, which entitles employees to take unpaid leave of up to 12 weeks in a one-year period. Maine’s new paid leave law will be more expansive than, and therefore supersede, the federal law. In other words, employers of 50 or more employees won’t have to offer both 12 weeks of paid leave under Maine’s law plus an additional 12 weeks of unpaid leave under the federal law.


Maine Charitable Immunity Law No Longer Applies to Child Sexual Assault Claims

Another bill passed by the Maine Legislature, L.D.1312, removes child sexual assault claims from the charitable immunity that charitable nonprofits enjoy under Maine’s common law. Charitable immunity is a rule that establishes immunity from tort liability for charities. Maine charitable organizations can raise charitable immunity as a defense to dismiss a lawsuit in its very early stages. The rationale behind the doctrine is that funds donated to charities should not be diverted to non-charitable purposes such as satisfying tort claims. Most states have abrogated their charitable immunity statutes and court rulings in recent decades, but Maine remains one of a handful of states in which the doctrine remains relatively robust. But that robustness has been increasingly eroded in recent years, especially to redress unjust outcomes around sexual assault matters.

First off, back in 1965 the Maine Legislature established a limited exception to the charitable immunity doctrine in 14M.R.S. Section 158, whereby such immunity is deemed waived to the extent that the organization has insurance covering the alleged wrongdoing. That makes sense. If a charity has an insurance policy available to pay damages for wrongdoing, why should the insurance company benefit from the charitable immunity doctrine?

Then in 2009 the Maine Supreme Court further eroded the charitable immunity doctrine in the case of Picher v. Roman Catholic Bishop of Portland, 2009 ME 67. The Court held that the charitable immunity doctrine does not apply to intentional torts. The tort claims in Picher were based on alleged sexual abuses condoned by the church, and were intentional in nature. Other intentional torts include: slander, libel, assault, battery, conversion(theft), false imprisonment, trespass to land, and intentional infliction of emotional distress.

The new law in Maine codifies the ruling in the Picher case, by specifying that charitable immunity does not apply to any intentional torts. Furthermore, the law expressly exempts a charitable organization from immunity for “any tort alleging negligent hiring, supervision or retention of an employee, agent or servant that arises out of sexual assault or sexual exploitation of a minor.” This bill follows the Legislature’s 2022 abolition of statute of limitations for child sexual assault cases, and applicability of the law is retroactive.

This law will have the most immediate impact on the Catholic Church and any other organizations that face civil claims based on past sexual abuse of minors. But all nonprofits that serve or otherwise work with minors should take note, and make sure they have sound practices to ensure that such assault doesn’t occur in the first place, and also that they have insurance coverage for sexual assault and harassment claims. The typical commercial general liability insurance policy excludes such claims, and a rider or a separate policy must be purchased.


Increased Federal Overtime Threshold Coming (Definitely Maybe)

Maine nonprofit employers are subject to federal and state overtime laws. In general, these laws require paying 150% of base salary for any hours over 40 worked in a regular work week. Certain employees are exempt from overtime based on their duties in executive, administrative or professional capacities, popularly knowns as the “white collar” exemptions. However, both federal and state law set minimum thresholds below which even these white-collar employees must be paid overtime. Maine law sets this salary threshold at $41,401 per year as of 2023, indexed each year for inflation. Meanwhile, the current federal salary threshold is $35,568 per year. So as things currently stand, Maine’s threshold is higher and is the applicable one. But…

On August 30, the federal Department of Labor issued a new proposed minimum salary threshold of $55,068 per year, which would also be indexed to inflation. There’s a comment period of 60 days, which might be extended. And then there are the possibility of court challenges, as was the case to a proposed overtime regulation issued during the Obama administration. For more on the implications of the higher federal threshold if it takes effect, read here.

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