If you’re an employer in Maine, your paid time off spreadsheet probably just got a little more
complicated – and your employees a little happier. With the passage of LD 55, “An Act to Amend the
Law Governing the Accrual of Earned Paid Leave,” Maine has expanded how much earned paid leave
(EPL) workers can build up over time and changed the way carryover interacts with annual accrual.
The changes took effect on September 24, 2025, and they’re a big deal for any business with more than
10 employees in the state.

In plain English: the old 40-hour “ceiling” on earned paid leave balances is gone. Employees can now
carry over unused earned paid leave and continue to accrue a full year’s worth of new time,
potentially reaching up to 80 hours (or more, if your policy is more generous). That’s great for
workers – and a loud reminder to employers to update policies, handbooks, and payroll systems.

In this guide, we’ll walk through what the original law required, what exactly changed under LD 55,
how the new accrual rules work in real life, and what both employers and employees should be doing
now. We’ll finish with practical, “on-the-ground” experiences that show how these new rules play out
in Maine workplaces.

A Quick Refresher on Maine’s Earned Paid Leave Law

Maine’s earned paid leave law was first enacted in 2019 and became effective January 1, 2021. It was
notable because it wasn’t limited to sick time – employees can use this leave for any
reason, from a doctor’s appointment or school conference to a flat tire or a mental-health
day.

Under the original framework:

• Covered employers are those with more than 10 employees in Maine for more than 120 days in a calendar year.
• Employees earn 1 hour of earned paid leave for every 40 hours worked.
• Employers are required to permit accrual of at least 40 hours per defined year, or more if the employer’s PTO policy is more generous.
• Leave can be used for almost any reason, not just illness or emergencies.
• All types of employees are covered: full-time, part-time, temporary, and per diem (with narrow exceptions for certain seasonal industries).
• Use can typically begin after 120 days of employment.

The idea was simple: build in a base level of paid time off that workers could rely on, while giving
employers some flexibility in how they structure PTO overall.

What’s Changing: LD 55 and the New Accrual Rules

The old accrual and carryover structure

Before LD 55, the statute and accompanying rules created an awkward marriage between accrual and
carryover. Although employees could accrue up to 40 hours of earned paid leave in a year and carry
up to 40 unused hours into the next year, those carried hours effectively counted against how much
they could earn in the new year.

For example, under the pre-amendment rules:

• If an employee carried over 0 hours, they could accrue the full 40 hours in the new year.
• If they carried over 20 hours, they could accrue only 20 hours in the new year, for a total of 40.
• If they carried over 40 hours, they might not accrue any new hours until that balance dropped.

In practice, that meant an employee’s balance was effectively “capped” around 40 hours at any point
in time. Good for predictability, perhaps, but not particularly generous and often confusing for HR
administrators and employees alike.

The new expanded accrual rules under LD 55

LD 55 changes that structure in a fundamental way. The big headline: carryover no longer
reduces how much an employee can accrue in the new year. Instead, an employee can carry
unused hours into the next benefit year and still earn a full year’s accrual on top of that.

Here’s how the new rules work in practice:

• An employee still earns at least 1 hour of earned paid leave for every 40 hours worked.
• An employer must still allow employees to accrue at least 40 hours of EPL each benefit year
  (or more, if the company policy is more generous).
• Any unused earned paid leave at the end of the year can be carried over into the next year.
• That carryover no longer reduces the amount of leave the employee can accrue in the new year.

So what does this actually look like in numbers?

• Example 1: An employee carries over 10 hours from Year 1 into Year 2. Under the
  new rules, they can still accrue a full 40 hours in Year 2. They could now hold up to 50 hours in
  their bank.
• Example 2: An employee carries over 40 hours from Year 1. In Year 2, they can
  accrue another full 40 hours, potentially reaching 80 hours in their bank.
• Example 3: Over multiple years, older carried hours may eventually “age out” and be
  forfeited according to the statute and your policy, but employees can still maintain up to 80 hours
  (or more if you allow it) moving forward.

In short, Maine’s earned paid leave system has shifted from a “use it or you’ll stop earning” model
to more of a “save it and still keep earning” structure. For many employees, that’s almost like
having a mini PTO savings account.

Can Employees Use All of That Time?

A naturally suspicious payroll manager might now ask: wait, if someone can build up 80 hours, do I
have to let them take all 80 hours off this year?

Under current guidance, employers may still be able to cap the amount of earned paid leave
an employee actually uses in a given year at 40 hours, even if the banked balance is
higher. That usage cap, however, must be applied carefully and consistently, and you should confirm
it aligns with your written policy and the latest Maine Department of Labor guidance.

The result is a structure where:

• Balances can exceed 40 hours because of carryover plus new accrual; and
• Actual usage may still be restricted to at least 40 hours per defined year, depending on policy and future regulatory updates.

Think of it as two separate concepts: the size of the bank (accrual and carryover)
and the withdrawal limit (how much can be used in a single year). LD 55 mainly
expands the bank; the usage limit may remain more constrained unless you voluntarily loosen it.

Who Must Comply?

The coverage threshold did not change. The amended rules still apply to:

• Employers with more than 10 employees in Maine for more than 120 days in a calendar year.
• Most employees who are covered by Maine’s unemployment insurance law, including part-time and per diem staff.
• All industries except those in designated seasonal industries that meet specific reporting requirements.

If you’re a very small business with 10 or fewer employees in Maine, the statute does not require
you to offer earned paid leave – although you might still voluntarily provide PTO and should make
sure your policy is consistent with other state and federal laws.

How the New Rules Affect Employers

1. Larger leave liabilities on the books

Because employee balances can now grow beyond 40 hours, employers may see a higher accrued
leave liability on their balance sheet – particularly if they voluntarily pay out unused
earned paid leave at termination. Even where payout isn’t required by law, many employers treat
earned paid leave as part of their general PTO bank, which may be subject to company policies or
separate state rules about payout.

For finance and HR, that means recalculating the maximum possible exposure per employee. Instead of
assuming a static 40-hour maximum, it may now be prudent to model up to 80 hours or more, depending
on your policy.

2. PTO banks vs. separate earned paid leave buckets

Some Maine employers maintain a distinct “earned paid leave” bucket that exactly tracks the
statutory minimum. Others use a broader PTO bank – for example, 80 or 120 hours per year that can be
used for vacation, sick time, and personal days – and rely on that bank to satisfy the EPL
requirement.

Under the new accrual and carryover rules, employers with a combined PTO bank should confirm that:

• The total accrual still meets or exceeds the statutory minimum of 1 hour per 40 worked, at least 40 hours per year.
• Employees are allowed to carry over unused time in a way that does not reduce their ability to accrue the minimum in the next year.
• Any caps on usage per year still comply with the law and are clearly described in the policy.

In some cases, it may be simpler to explicitly label a portion of your PTO as “earned paid leave”
and track that segment carefully, especially if your PTO structure is more complex (for example,
different accrual tiers for seniority).

3. Policy and handbook updates

Almost every employer covered by the law will need to tweak (or completely rewrite) their written
policies. Anywhere your handbook currently says something like:

“Employees can carry over up to 40 hours and will only accrue additional hours up to a total of 40 per year.”

…you likely need to update that language. Policy provisions that limit accrual in the new year
because of carryover are now out of sync with LD 55. This is especially important for employers that
operate in multiple states and rely on multi-state PTO templates that were previously tuned to a
40-hour cap.

4. Payroll and timekeeping system changes

Your payroll vendor or timekeeping software needs to understand these new rules just as much as your
HR team does. Systems that automatically suppress new accrual once an employee hits 40 hours will
need to be reconfigured so that:

• Carryover hours move into the new benefit year correctly.
• Accrual continues in the new year up to at least 40 hours, even when carryover exists.
• Any usage caps (for example, “employees may use up to 40 hours per year”) are enforced without blocking lawful accrual.

Failing to update the system can quickly turn into an unintentional wage-and-hour problem if employees
stop accruing leave when they legally should be.

What Employees Need to Know

While most of the administrative burden falls on employers, employees should also understand how the
new rules protect them and how to avoid surprises.

• You can build a larger cushion. If you don’t use all your earned paid leave in a
  given year, you can carry it over and still earn a full year’s worth of new leave.
• You may not be able to use everything at once. Even with a bigger bank, your
  employer may still cap how much you can use in a single year (as long as it meets the legal
  minimum and policy language).
• Plan ahead when you can. For non-emergency reasons, Maine law allows employers to
  require reasonable advance notice (up to four weeks) so staffing can be managed.
• Check how leave interacts with other programs. As Maine’s separate Paid Family
  and Medical Leave program comes online, you’ll want to know how earned paid leave, employer PTO,
  and state benefits work together for longer absences.

The bottom line for employees: the new rules give you more flexibility and security. You’re less
pressured to burn your hours at the end of the year simply to avoid losing future accrual.

How to Get Compliant: Practical Steps for Employers

If you’re a Maine employer covered by the statute, here’s a practical checklist to help you align
with the expanded accrual rules:

1. Audit your current policy. Look for any language tying new-year accrual to carryover
   (for example, “employees who carry over 20 hours may only accrue 20 more hours”). Flag those
   provisions for revision.
2. Model your financial exposure. Work with finance to estimate what it means if
   employees maintain up to 80 hours or more of earned paid leave. This can influence budgeting and
   staffing strategies.
3. Update payroll and HRIS settings. Confirm that your systems will:
   • Carry over unused earned paid leave into the new benefit year; and
   • Continue accruing leave in the new year regardless of carryover, up to at least 40 hours.
4. Clarify usage caps. Decide whether you’ll allow employees to use more than 40 hours
   per year or maintain a usage cap. Whatever you choose, write it clearly and make sure it complies
   with the law.
5. Train managers and supervisors. Front-line leaders need to understand that “we
   don’t approve that much leave” is not a lawful reason to deny earned paid leave that meets the
   statute and internal policy.
6. Communicate with employees. Share a short, plain-language summary explaining that
   accrual rules have expanded, what that means for them, and where they can see their updated leave
   balances.

Getting this right is not just about avoiding penalties – it also signals that your organization
respects employees’ time and complies with Maine’s evolving pro-leave landscape.

Real-World Experiences with Maine’s Expanded Accrual Rules

Legal updates always sound clean and tidy on paper. In real workplaces, they’re a little messier –
and much more human. Here are some practical experiences, stories, and patterns that have emerged as
Maine employers adapt to the new earned paid leave accrual rules.

1. The small restaurant that discovered “hidden” leave liability

A family-owned restaurant with about 25 employees had technically complied with earned paid leave
since 2021, but the owner never paid much attention to what would happen if balances grew. The
handbook said employees could carry up to 40 hours, and the payroll system simply stopped new
accrual when an employee hit that mark.

When LD 55 went into effect, their payroll provider updated the default settings so carryover would
no longer block new accrual. Overnight, several long-term employees started trending toward 60–70
hours in their banks. The owner initially panicked, imagining everyone requesting weeks off during
summer peak.

Working with an HR consultant, they re-framed the issue: those extra hours were actually a retention
tool. The restaurant kept a 40-hour usage cap per year (for now) but clearly communicated that
balances above 40 could be used later or combined with other PTO when business was slower. The
result? Employees felt more secure, and the owner gained a better understanding of how to
strategically schedule leave instead of fighting it.

2. The multi-state employer juggling different rules

A regional healthcare company employing staff in Maine, Massachusetts, and New Hampshire already had
a robust PTO program. For years, they assumed their 80-hour annual PTO grant automatically satisfied
Maine’s earned paid leave law, and in many ways it did – but their policy also capped balances
at 80 hours and blocked new accrual when an employee reached that cap.

After LD 55, the company realized that if a Maine-based employee carried 40 hours forward, the
system would effectively prevent them from accruing the “statutory minimum” 40 additional hours in
the new year. The solution was subtle: they kept the 80-hour balance cap for overall PTO but created
an internal “shadow” tracking field for the first 40 hours that is always allowed to accrue annually
regardless of carryover.

That experience underscored a broader lesson: multi-state employers cannot rely on one-size-fits-all PTO logic.
State-specific minimums – like Maine’s expanded earned paid leave rules – need to be reflected in
the back-end math, not just the handbook text.

3. The HR director who used the change to reset culture

At a mid-sized tech company in Portland, the HR director had long suspected that employees felt
guilty using their earned paid leave. Even though the law clearly allows leave “for any reason,”
people tended to save time only for illness or emergencies, and managers silently celebrated the
folks who “never take time off.”

When LD 55 expanded accrual rules, HR used the change as an excuse to reset expectations. The
company rolled out a refreshed policy with a friendly explainer: how accrual works, how balances can
grow, and why the company actively encourages employees to take time off before burnout sets in.
Finance modeled the new 80-hour potential cap, and leadership agreed that the cost of more time off
was worth it compared to turnover and disengagement.

The HR director even hosted a short “use your leave” campaign with tips for planning time away and
sample scripts for employees to request time. The legal change became a cultural pivot – from
“earned paid leave as a compliance headache” to “earned paid leave as an essential part of a healthy
workplace.”

4. Lessons learned for employers and employees

Across these experiences, a few themes repeat:

• Ignoring the math is risky. If you don’t understand how your system calculates
  accrual, carryover, and usage caps, you’re one update away from an expensive mistake.
• Communication beats surprises. Employees respond better when they know exactly
  how much leave they have, how it grows, and how much they can realistically use each year.
• Culture matters as much as compliance. A technically compliant policy is not the
  same as a healthy time-off culture. LD 55 offers a chance to rethink both.

Maine’s expansion of earned paid leave accrual rules may look like a small tweak in statutory
language, but its impact on staffing, budgeting, and employee wellbeing is significant. Employers
that engage with the details now – instead of treating leave as an afterthought – will be in the
best position to attract and retain talent in an increasingly competitive labor market.

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