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2001 Maine Attorney General Reports and Opinions 1 (2001)

handle is hein.sag/sagme0029 and id is 1 raw text is: 01-01 Rco,10NAL Qn'cEs: 0-1 HARLOWV Sr.. -.,41 FLOO.R G. STEVEN RowET ATTORNEY GENERAL PORTL., ND. MAINE 0)4 LO 1-30 14 TEL: C207) 3,22-0260) FAX: 1207) 822-0259 Teleohone: (207) 62E-9800 STATE OF NIAINE TOO: (2071 625-8E5 DEPARTMENT OF THE ATTORNEY GENERAL 123 SWEDEN S1.. STE. 2 6 STATE HOUSE STATION 1 476 AUGUSTA, MIAINE 043 33-0006 : e207) 496-3291 August 1, 2001 Michael V. Frett, Director Bureau of Labor Standards 45 State House Station Augusta, E 04333M-0045 Dear Director Frett: You have asked our opinion as to the severance pay liability of an employer who has owned a covered establishment for more than three years to employees who were employed at that establishment for a period that is longer than the period of that employer's ownership of the establishment.t1 This appears to be the first time that this Office has been asked to render a formal opinion on this issue. For the reasons set forth below, it is the opinion of this Office that the severance pay liability of the employer that has owned a covered establishment for more than three years is one week's pay for each year the employee has worked in that establishment, regardless of any change(s) in ownership of the establishment during an employee's period of service. The Maine severance pay statute, 26 M.R.S.A. § 625-B (1988 & Supp. 2000),- was enacted to address the 'economic recession that invariably results in a community where a large number of people simultaneously lose their jobs' and to 'alleviate the adverse economic impact upon the employees and the community in which they live.' State v. L-... Group, 1997 MiE 25. 1 12, n. 5, 690 A.2d 960, 965 (quoting L. D. 42-4, Statement of Fact (I 05,h Legis. 1971)). It is [d~esiganed to protect MLvaine citizens from. the economic dislocation that accompanied closing of largze establishments. Director of Bureau of Labor Standards v. Fort Halifax Packing Co., 'Your question assumes that the prerequisites to liability under Mfaine's severance pay law have been satisfied. i.e., that an employer has relocated or terminated a covered establishment within the meaning of those terms as defined by the statute. This opinion is limited to the issue of the amount of severance pay that is owed to employees who have worked in a covered establishment for period of time that is longer than the time that it has been owned by the owner of the facility at the time of the relocation or termination. 2 Formerly 26 M.R.S.A. § 625-A. The severance pay statute has its roots in an [387 enactment of the Legislature. later codified as R.S. ch. 40 t(1903). which provided that employers and employees could contract Cor the employer to pay a Corfeiture of the week's wages to an employee if the employer discharged the employee without providing one week's notice; or for an employee to forfeit a week's wages if the employee quit without affording one week's notice. Section 6254-B is laraely the result of substantial amendments in 197 1 and 19'73. which established severance pay liability for certain employers who ceased or relocated operations. the calculation of which was generally based on lena-Th of service.

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