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 Amendment CA_A_S409 (Senate)
Amends: 26 MRSA §625-B

COMMITTEE AMENDMENT "A" to S.P. 515, L.D. 1389, Bill, "An Act To 
Conform Maine Law to Federal Law Regarding Closings and Mass Layoffs and To 
Strengthen Employee Severance Pay Protections" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'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 whleh that employs or has employed at any time in the preceding 12-month 
period I 00 or more persons. 
A-1. 
"Closing" means the permanent shutdown of industrial or commercial 
operations at a covered establishment. 
A closing may occur due to relocation, 
termination or consolidation of the employer's business. 
B. "Director" means the Director of the Bureau of Labor Standards. 
B-1. "Eligible employee" means any employee who: 
(1) Has been continuously employed at the covered establishment at the time of 
the closing or mass layoff for at least 3 years, including any period when the 
employee was on a leave of absence; 
(2) Has not been terminated for cause; and 
(3) Has not accepted employment at another or relocated establishment operated 
by the employer or remains employed at the covered establishment. 
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COMMITTEE AMENDMENT" A" to S.P. 515, L.D. 1389 
"Eligible employee" includes an employee who has voluntarily quit employment at a 
covered establishment to take a new job within a 30-day period prior to the date set 
by the employer for a closing or mass layoff in an initial notice provided by the 
employer under state or federal law. 
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. 
"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 earned within the last 12 months prior to the closing or mass 
layoff. "Gross earnings" does not include payments made under a 3rd-party benefit 
program, such as disability payments. 
C-2. "Mass layoff'' means a reduction in workforce, not the result of a closing, that 
results in an employment loss at a covered establishment for at least 6 months of at 
least: 
(1) Thirty-three percent of the employees and at least 50 employees; or 
(2) Five hundred employees. 
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. 
"Termia&iioa" mea-H:s the s1:1asta:atial eessatioa of iaoostrial or eommereial 
operEttioas ia a eovered establishmeat. 
H. "Week's pay" means an amount equal to the employee's gross earnings during the 
months previous to the date of termiaEttioa or reloeEttioa closing or mass layoff as 
established by the director or the date of the termiaatioa or layoff of the employee, 
should it oeeur earlier, divided by the number of weeks in which the employee 
wodEed received gross earnings during that 12-month period. 
2. Severance pay. Any employer who reloeates or termiaEttes closes or engages in a 
mass layoff at a covered establishment shall be !§. liable to hls eligible employees of the 
covered establishment for severance pay at the rate of one week's pay for each year, and 
partial pay for any partial year, from the last full month of employment by the employee 
in that establishment. The severance pay to eligible employees shall be !§. 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: 
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COMMITTEE AMENDMENT" A" to S.P. 515, L.D. 1389 
A. Reloeation or termination Closing of or a mass layoff at a covered establishment 
is necessitated by a physical calamity or the final order of a federal, state or local 
government agency; 
B. The employee is covered by, and has actually been paid under the terms of, an 
express contract providing for severance pay that is equal to or in an amount that is 
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 than 
provided in this section; or 
C. That employee aeoepts employment at the new looation; 
D. -That The employee has been employed by the employer for less than 3 yearst-ef0 
E. A oovered establishment files for protection Hnder 11 United States Code, Chapter 
Hnless the filing is later converted to a filing Hnder 11 UH.ited States Code, Chapter 
+: 
3-A. 
Bankruptcy proceedings. 
A covered establishment is not exempt from 
liability for severance pay under this section solely because it files a voluntary petition for 
bankruptcy protection under the provisions of Chapter 7 or Chapter 11 of the United 
States Bankruptcy Code, 11 United States Code, Section 101, et seq., or because an 
involuntary petition is commenced against it pursuant to 11 United States Code, Section 
303. 
4. Suits by, or on behalf of, employees. Any employer who violates the provisions 
of this section shall be ~ 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 sooh pending 
action brought and maintained under subsection 4, 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 or closing. A person initiating a mass layoff at a covered establishment shall 
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COMMITTEE AMENDMENT" A" to S.P. 515, L.D. 1389 
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 tenmaate or to 
reloeate close a covered establishment otttside the State shall notify employees and the 
municipal officers of the municipality where the J*aftt covered establishment is located in 
writing not less than 60 days prior to the termiaatioa or reloeatioa 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 reloeatioa closing is necessitated by a physical 
calamity or the final order of a federal, state or local government agency, 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 swstaative routine technical rules as 
defined in Title 5, chapter 375, subchapter II-A 2-A. lncitial rules mttst ae aro11isioaally 
adooted aad sttbmitted to the Le!!islature aet later thaa Jaamwv 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. Wheae,,er aa effif1loyer lays off 100 or more Offiflloyees at a 
eovered estaalisfuneat, the effif1loyer v,rithia 7 days of stteh a layoff shall report to the 
direetor the e*Peeted dttratioa of the layoff aad 1Nfl:ether it is of iadefinite or aefmite 
d1:-1ratioa. The direetor shall, from time to time, aHt ao less :§:eqHeatly thaa O'lef)' 3Q days, 
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reqHire the effif1loyer to report sHeh faets as the direetor eoasiders rele1,.raat to a 
detenmaatioa as to whether the layoff eoastitHtes a termiaatioa or reloeatioa Hader this 
seetioa or whether there is a sttbstaatial reasoa to aelieve the affeeted em13lo11ees v,rill be 
reealled withia a reaseaahle time.' 
SUMMARY 
This amendment makes a number of changes to the bill, including the following. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A "to S.P. 515,L.D.1389 
1. It adds a mass layoff as a condition triggering severance pay liability, and changes 
the new definition of "mass layoff' to encompass a 6-month period as opposed to the 30-
day period in the bill. 
2. It defines "eligible employee" for purposes of severance pay eligibility, and 
expands eligibility to employees who have voluntarily quit employment with a covered 
establishment within a 30-day period prior to the date set in a notice of a mass layoff or 
closing provided by the employer under state or federal law. 
3. It requires the severance pay calculation for an employee to include partial years 
worked by an employee and to include any weeks that the employee received gross 
earnings, as opposed to having worked, in the 12 months prior to an establishment closing 
or instituting a mass layoff. 
4. It eliminates the exemption from severance pay and notice requirements when a 
closing or mass layoff is due to an adjudication of bankruptcy, and clarifies the bill's 
elimination of the exemption from severance pay for an establishment that files for 
bankruptcy protection. 
5. It changes the notification requirements in the bill to include when an 
establishment relocates, consistent with current law. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 03/11/16 
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LO 1389 
LR 460(02) 
An Act To Conform Maine Law to Federal Law Regarding Closings and Mass Layoffs and To 
Strengthen Employee Severance Pay Protections 
Fiscal Note for Bill as Amended by Committee Amendment'~' (,S-l(O'\) 
Committee: Labor, Commerce, Research and Economic Developm~t 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - General Fund 
Fiscal Detail and Notes 
Additional costs to the Bureau of Labor Standards within the Department of Labor to amend its rules regarding 
severance pay can be absorbed within existing budgeted resources. 
LR0460(02) - Fiscal Note - Page I of I