Bills to Watch: Severance Pay Regulations (LD 12)
LD 12, sponsored by Rep. Amy Roeder (D-Bangor), aims to eliminate exemptions and expand the scope of businesses required to provide severance pay to their employees.
Under current law, a “covered establishment” – an industrial or commercial facility that employed 100 or more employees at any time in the previous 12 months – is required to pay out severance if the business closes or relocates to another jurisdiction.
Additionally, current law states a business has no liability to provide severance pay to an employee if the employee has been employed by the business for less than three years.
Under Rep. Roeder’s LD 12, the industrial and commercial requirements would be struck from existing law, meaning any business with 100 or more employees at any time in the last year would be required to pay severance to employees if the business closes or relocates.
LD 12 also eliminates the exemption that a business would not be required to provide severance pay to an employee who was employed by the business for less than three years. Under the bill, a business which hired an employee three months prior to its closing or relocation would still be required to provide severance pay to that employee.
The full bill can be read here.
The bill has not yet been scheduled for a public hearing.