Payroll Maine, Unique Aspects of Maine Payroll Law and Practice
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Maine Revenue Services
Withholding Tax Division
State Office Bldg.
P.O. Box 1061
Augusta, ME 04332-1061
(207) 626-8475
www.state.me.us/revenue/
Maine requires that you use Maine form "W-4ME, Employee's Maine Withholding Allowance Certificate" instead of a Federal W-4 Form for Maine State Income Tax Withholding.
Not all states allow salary reductions made under Section 125 cafeteria plans or 401(k) to be treated in the same manner as the IRS code allows. In Maine cafeteria plans are not taxable for income tax calculation; not taxable for unemployment insurance purposes. 401(k) plan deferrals are not taxable for income taxes; taxable for unemployment purposes. www.state.me.us/revenue/
In Maine supplemental wages are taxed at a 5% flat rate.
You must file your Maine State W-2s by magnetic media if you are required to file your federal W-2s by magnetic media.
The Maine State Unemployment Insurance Agency is:
Bureau of Employment Security
Division of Unemployment Compensation
P.O. Box 309
20 Union St.
Augusta, ME 04332-0309
(207) 287-3176
www.state.me.us/labor/uitax/uctax.html
The State of Maine taxable wage base for unemployment purposes is wages up to $12,000.00.
Maine requires Magnetic media reporting of quarterly wage reporting if the employer has at least 250 employees that they are reporting that quarter.
Unemployment records must be retained in Maine for a minimum period of four years. This information generally includes: name; social security number; dates of hire, rehire and termination; wages by period; payroll pay periods and pay dates; date and circumstances of termination.
The Maine State Agency charged with enforcing the state wage and hour laws is:
Department of Labor
Bureau of Labor Standards
Wage and Hour Division
45 State House Station
Augusta, ME 04333-0045
(207) 624-6400
http://www.maine.gov/labor/labor_laws/wagehour.html
The minimum wage in Maine is $6.25 per hour.
The general provision in Maine concerning paying overtime in a non-FLSA covered employer is one and one half times regular rate after 40-hour week.
Maine State new hire reporting requirements are that every employer must report every new hire and rehire. The employer must report the federally required elements of:
Employee's name
Employee's address
Employee's date of birth.
Employee's UBI or UI number.
Employee's social security number
Employer's name
Employers address
Employer's Federal Employer Identification Number (EIN)
This information must be reported within 7 days of the hiring or rehiring.
The information can be sent as a W4 or equivalent by mail, fax or electronically.
There is a written warning penalty then a $200 per month penalty for a late report in Maine.
The Maine new hire-reporting agency can be reached at 207-287-2886 or on the web at http://state.me.us/dhs/bfi/dser/New_Hire.htm.
Maine does allow compulsory direct deposit but the employee's choice of financial institution must meet federal Regulation E regarding choice of financial institutions.
Maine requires the following information on an employee's pay stub:
Gross and Net Earnings
pay period dates
hours worked
itemized deductions
Maine requires that employee be paid in intervals of not more than 16 days; less frequently for FLSA-exempt employees.
Maine requires that the lag time between the end of the pay period and the payment of wages to the employee not exceed eight days.
Maine payroll law requires that involuntarily terminated employees must be paid their final pay earlier of next regular payday or 14 days after demand for payment and that voluntarily terminated employees must be paid their final pay earlier of next regular payday or 14 days after demand for payment or by mail if employee requests it.
There is no provision in Maine law concerning paying deceased employees.
Escheat laws in Maine require that unclaimed wages be paid over to the state after one year.
The employer is further required in Maine to keep a record of the wages abandoned and turned over to the state for a period of 10 years.
Maine payroll law mandates no more than 50% of minimum wage may be used as a tip credit.
In Maine the payroll laws covering mandatory rest or meal breaks are only that all employees must have 30 minutes rest after six hours of work.
Maine statute requires that wage and hour records be kept for a period of not less than three years. These records will normally consist of at least the information required under FLSA.
The Maine agency charged with enforcing Child Support Orders and laws is:
Division of Support Enforcement
Department of Human Services
11 State House Station
Augusta, ME 04333
(207) 287-2826
http://www.maine.gov/dhhs/index.shtml
Maine has the following provisions for child support deductions:
When to start Withholding? Immediately after receipt of order.
When to send Payment? Within 7 days of Payday.
When to send Termination Notice? Within 15 days of termination.
Maximum Administrative Fee? $2 per transaction.
Withholding Limits? Federal Rules under CCPA.
Please note that this article is not updated for changes that can and will happen from time to time.
About the Author
Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice. Mr. Read is the author of “How to Start a New Business.” To find professional payroll service at a budget price go to www.PayrollonaBudget.com a paperless payroll company. For a full service payroll bureau with CPA’s on staff visit www.CustomPayroll.com . See an excerpt of Mr. Read’s interviews from William Shatners “Heartbeat of America” television show on the web sites linked above.
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