An Act Regarding the Treatment of Vacation Time upon the Cessation of Employment
Maine Legislature, Session 130, LD 0225
Committee: Labor and Housing
Sponsors: ROEDER, CUDDY
Amends: 26 MRSA §626

Legislative Document
No. 225
H.P. 160
House of Representatives, January 27, 2021
An Act Regarding the Treatment of Vacation Time upon the 
Cessation of Employment
Received by the Clerk of the House on January 25, 2021.  Referred to the Committee on 
Labor and Housing pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 
401.
ROBERT B. HUNT
Clerk
Presented by Representative ROEDER of Bangor.
Cosponsored by Representative: CUDDY of Winterport.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  26 MRSA §626, first ¶, as amended by PL 2017, c. 219, §11, is further 
amended to read:
An employee leaving employment must be paid in full no later than the employee's 
next established payday.  Any overcompensation may be withheld if authorized under 
section 635 and any loan or advance against future earnings or wages may be deducted if 
evidenced by a statement in writing signed by the employee.  Whenever the terms of 
employment or the employer's established practice includes provisions for paid vacations, 
all accrued vacation pay must be paid to the employee on cessation of employment has the 
same status as wages earned.
Sec. 2.  26 MRSA §626, 5th ¶, as amended by PL 1991, c. 162, is further amended 
to read:
An action for unpaid wages under this section may be brought by the affected employee 
or employees or by the Department of Labor on behalf of the employee or employees.  An 
employer found in violation of this section is liable for the amount of unpaid wages and, in 
all accrued vacation pay that must be paid to the employee or employees on cessation of 
employment pursuant to this section.  In addition, the judgment rendered in favor of the 
employee or employees must include a reasonable rate of interest, an additional amount 
equal to twice the amount of those unpaid wages and that accrued vacation pay as liquidated 
damages and costs of suit, including a reasonable attorney's fee.
Sec. 3.  26 MRSA §626, 6th ¶, as amended by PL 2017, c. 219, §12, is further 
amended to read:
Within 2 weeks after the sale of a business, the seller of the business shall pay 
employees of that business any wages earned while employed by the seller.  If the terms of 
employment or the employer's established practice includes provisions for paid vacations, 
all accrued vacation pay must be paid to the employee on cessation of employment has the 
same status as wages earned.  The seller of a business may comply with the provisions of 
this paragraph through a specific agreement with the buyer in which the buyer agrees to 
pay any wages earned by employees through employment with the seller and to honor any 
paid vacation earned under the seller's vacation policy.
SUMMARY
This bill amends the law governing the provision of vacation pay on cessation of 
employment.  Under current law, on cessation of employment, if the terms of employment 
or established practice includes provisions for paid vacations, vacation pay has the same 
status as wages earned.  This bill provides that on cessation of employment all accrued 
vacation pay must be paid to the employee.