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Bangor finance committee backs application to opt city into private paid family medical leave plan
Summary
The finance committee voted to apply for a private paid family medical leave plan with The Standard at a 0.885% rate and to forward a contract to full council, a move staff says could save the city about $850,000 over three years if approved by the state.
The Bangor City Finance Committee voted to submit an application to the state and move forward with a private paid family medical leave plan through The Standard at a rate of 0.885%, staff said Monday night.
City staff told the committee the private plan would replace the city's contributions into the statewide pool under a new state law requiring employers to withhold 1% of employees' gross wages beginning in February to fund paid family and medical leave. If the city's application is approved by the state before the end of the month, staff said the city would be exempt from further state withholdings (except for the first quarter already remitted) until May 2026, and the city would remit the 0.885% rate to The Standard thereafter. Staff estimated the three-year savings at nearly $850,000.
The change would require the city to execute a private-plan contract and submit the application to the state. Staff and the committee discussed administrative unknowns, including how employers will handle tax reporting for benefits paid under the program. Committee members asked whether the city would lose benefits by opting out of the state plan; staff said they were not aware of benefits that would be lost but acknowledged some administrative duties remain uncertain until the state finalizes guidance. Staff also told the committee the first quarter's withholding has already been submitted to the state and is not refundable.
Committee members moved and seconded the recommendation to move forward; the item will be on the full council agenda next week for final action, staff said.
Staff emphasized that the application deadline matters if the city seeks the temporary exemption from state withholding between now and May 2026. The program's benefit eligibility will not begin until May 2026, per staff's presentation. The committee's recommendation, if approved by full council and by the state, would lock the city into the private-plan rate for the stated period described by staff.
