An Act To Conform Maine Law to Federal Law Regarding Closings and Mass Layoffs and To Strengthen Employee Severance Pay Protections
Maine Legislature, Session 127, LD 1389
Committee: Labor, Commerce, Research and Economic Development
Sponsors: ROSEN, CUSHING, THIBODEAU
Amends: 26 MRSA §625-B

Legislative Document 
No. 1389 
S.P. 515 
In Senate, May 6, 2015 
An Act To Conform Maine Law to Federal Law Regarding Closings 
and Mass Layoffs and To Strengthen Employee Severance Pay 
Protections 
Submitted by the Department of Labor pursuant to Joint Rule 204. 
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed. 
HEATHER J.R. PRIEST 
Secretary of the Senate 
Presented by Senator ROSEN of Hancock. 
Cosponsored by Senators: CUSHING of Penobscot, President THIBODEAU of Waldo. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  26 MRSA §625-B, as amended by PL 2009, c. 305, §§1 to 4 and affected 
by §5, is further amended to read: 
§625-B.  Severance pay due to closing, substantial shutdown or relocation of a 
covered establishment 
1.  Definitions. As used in this section, unless the context otherwise indicates, the 
following words shall have the following meanings. 
A.  "Covered establishment" means any industrial or commercial facility or part 
thereof which that employs or has employed at any time in the preceding 12-month 
period 100 or more persons. 
A-1.  "Closing" means the permanent or temporary substantial shutdown of industrial 
or commercial operations if the shutdown results in an employment loss at a covered 
establishment for a 30-consecutive-day period for 50 or more employees, excluding 
any part-time employees.  A closing may occur due to relocation. 
B.  "Director" means the Director of the Bureau of Labor Standards. 
C.  "Employer" means any person who directly or indirectly owns and operates a 
covered establishment.  For purposes of this definition, a parent corporation is 
considered the indirect owner and operator of any covered establishment that is 
directly owned and operated by its corporate subsidiary. 
C-1.  "Employment loss" means an employment termination, other than a discharge 
for cause, voluntary departure or retirement, when there is no definite recall date.  
Employment loss can occur due to a layoff exceeding 6 consecutive months or a 
reduction in employees' hours of work of more than 50% for each month of a 6-
consecutive-month period.  Ambiguous language of an employer regarding the 
duration and nature of an employment loss may not be construed to prevent potential 
liability for payment of severance under this section. 
C-2.  "Gross earnings" includes all pay for regular hours, shift differentials, 
premiums, overtime, floating holidays, holidays, funeral leave, jury duty pay, sick 
pay and vacation pay.  "Gross earnings" does not include payments made under a 
3rd-party benefit program, such as disability payments. 
C-3.  "Mass layoff" means a reduction in workforce, not the result of a closing, that 
results in an employment loss at a covered establishment for a 30-consecutive-day 
period.  A layoff is considered a mass layoff when the following numbers of 
employees are affected, excluding part-time employees: 
(1)  At least 33% of the employees and at least 50 employees; or 
(2)  At least 500 employees. 
C-4.  "Part-time employee" means an employee who is employed for an average of 
fewer than 20 hours per week or who has been employed for fewer than 6 of the 12 
months preceding the date on which notice is required under this section. 
D.  "Person" means any individual, group of individuals, partnership, corporation, 
association or any other entity. 
E.  "Physical calamity" means any calamity such as fire, flood or other natural 
disaster. 
F.  "Relocation" means the removal of all or substantially all of industrial or 
commercial operations in a covered establishment to a new location, within or 
without the State of Maine, 100 or more miles distant from its original location. 
G.  "Termination" means the substantial cessation of industrial or commercial 
operations in a covered establishment. 
H.  "Week's pay" means an amount equal to the employee's gross earnings during the 
months previous to the date of termination or relocation closing as established by 
the director or the date of the termination or layoff of the employee, should it occur 
earlier, divided by the number of weeks in which the employee worked during that 
period. 
2.  Severance pay.  Any employer who relocates or terminates closing a covered 
establishment shall be is liable to his that employer's employees for severance pay at the 
rate of one week's pay for each year of employment by the employee in that 
establishment. The severance pay to eligible employees shall be is in addition to any final 
wage payment to the employee and shall must be paid within one regular pay period after 
the employee's last full day of work, notwithstanding any other provisions of law. 
3.  Mitigation of severance pay liability.  There is no liability under this section for 
severance pay to an eligible employee if:  
A.  Relocation or termination Closing of a covered establishment is necessitated by a 
physical calamity or the final order of a federal, state or local government agency, 
including an adjudication of bankruptcy; 
B.  The employee is covered by, and has been paid under the terms of, an express 
contract providing for severance pay that is equal to or greater than the severance pay 
required by this section.  An employer must demonstrate, to the satisfaction of the 
director, that the severance pay provided under the terms of an express contract 
provides a greater benefit to the employee; 
C.  That The employer relocates and the employee accepts employment at the new 
location; or 
D.  That employee has been employed by the employer for less than 3 years; or. 
E.  A covered establishment files for protection under 11 United States Code, Chapter 
unless the filing is later converted to a filing under 11 United States Code, Chapter 
7. 
4.  Suits by, or on behalf of, employees. Any employer who violates the provisions 
of this section shall be is liable to the employee or employees affected in the amount of 
their unpaid severance pay. Action to recover the liability may be maintained against any 
employer in any state or federal court of competent jurisdiction by any one or more 
employees for and on behalf of himself that employee or themselves those employees and 
any other employees similarly situated. Any labor organization may also maintain an 
action on behalf of its members. The court in such action shall, in addition to any 
judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid 
by the defendant and costs of the action. 
5.  Suits by the director. The director is authorized to supervise the payment of the 
unpaid severance pay owing to any employee under this section. The director may bring 
an action in any court of competent jurisdiction to recover the amount of any unpaid 
severance pay. The right provided by subsection 4 to bring an action by or on behalf of 
any employee, and of any employee to become a party plaintiff to any such action, shall 
terminate terminates upon the filing of a complaint by the director in an action under this 
subsection, unless the action is dismissed without prejudice by the director. Any sums 
recovered by the director on behalf of an employee pursuant to this subsection shall must 
be held in a special deposit account and shall must be paid, on order of the director, 
directly to the employee affected. Any sums thus recovered not paid to an employee 
because of inability to do so within a period of 3 years shall must be paid over to the State 
of Maine. 
6.  Notice of director.  Any person proposing to relocate or terminate close a covered 
establishment shall notify the director in writing not less than 60 days prior to the 
relocation closing.  A person initiating a mass layoff at a covered establishment shall 
notify the director as far in advance as practicable, and no later than within 7 days of the 
layoff, and shall report to the director the expected duration of the layoff and whether it is 
of indefinite or definite duration.  The director shall, from time to time, but no less 
frequently than every 30 days, require the employer to report such facts as the director 
considers relevant to determine whether the mass layoff constitutes a closing under this 
section or whether there is a substantial reason to believe the affected employees will be 
recalled.  A notification or report provided to the director pursuant to this subsection must 
contain all relevant information in the possession of the employer regarding a potential 
recall, if applicable. 
6-A.  Notice to employees and municipality. A person proposing to terminate or to 
relocate close a covered establishment outside the State shall notify employees and the 
municipal officers of the municipality where the plant covered establishment is located in 
writing not less than 60 days prior to the termination or relocation closing, unless this 
notice requirement is waived by the director.  A person that violates this provision 
commits a civil violation for which a fine of not more than $500 may be adjudged, except 
that a fine may not be adjudged if the relocation closing is necessitated by a physical 
calamity or the final order of a federal, state or local government agency, including an 
adjudication of bankruptcy, or if the failure to give notice is due to unforeseen 
circumstances.  A fine imposed pursuant to this subsection may not be collected by the 
Department of Labor to the extent such collection prevents the violator from making all 
payments required under subsection 2. 
7.  Powers of director. In any investigation or proceeding under this section, the 
director shall have has, in addition to all other powers granted by law, the authority to 
examine books and records of any employer affected by this section as set out in section 
665, subsection 1. 
8.  Rules.  The Department of Labor shall adopt rules to implement this section.  
Rules adopted pursuant to this subsection are major substantive routine technical rules as 
defined in Title 5, chapter 375, subchapter II-A 2-A.  Initial rules must be provisionally 
adopted and submitted to the Legislature not later than January 15, 2003. 
9.  Penalties.  A person that violates subsection 2 commits a civil violation for which 
a fine of not more than $1,000 per violation may be adjudged.  Each employee affected 
constitutes a separate violation.  Any such fine may not be collected by the Department of 
Labor to the extent such collection prevents the violator from making all payments 
required under subsection 2. 
10.  Mass layoff.  Whenever an employer lays off 100 or more employees at a 
covered establishment, the employer within 7 days of such a layoff shall report to the 
director the expected duration of the layoff and whether it is of indefinite or definite 
duration.  The director shall, from time to time, but no less frequently than every 30 days, 
require the employer to report such facts as the director considers relevant to a 
determination as to whether the layoff constitutes a termination or relocation under this 
section or whether there is a substantial reason to believe the affected employees will be 
recalled within a reasonable time. 
SUMMARY 
This bill clarifies and strengthens the laws governing severance pay.  It adds 
definitions for "closing," "mass layoff," "part-time employee," "employment loss" and 
"gross earnings."  It provides that ambiguous language of an employer regarding the 
duration and nature of an employment loss may not be construed to prevent potential 
liability for payment of severance.  The bill changes the circumstances that mitigate 
liability for severance pay by adding the closing of a covered establishment that is 
necessitated by the final order of a federal, state or local government agency, including an 
adjudication of bankruptcy.  It amends the laws governing advance notice of a closing so 
they conform to the federal Worker Adjustment and Retraining Notification Act, also 
known as the WARN Act, 29 United States Code, Sections 2101 to 2109 (2014) and 
changes the designation of rules from major substantive to routine technical.