The paper mill in Bucksport, currently owned by Verso Paper, will be shutting down and hundreds of workers will be laid off. When a closure of a workplace this size occurs in Maine, state law requires the employer to provide severance pay to laid off employees who have worked three years or more for the employer. Each employee’s severance pay must be equal to one week of wages for every year the employee worked for the employer. The law requires the employer to pay this severance pay “within one regular pay period after the employee’s last full day of work.”
In addition to this severance pay law, Maine also has a law which requires an employer to pay an employee the wages he has earned and the vacation time he has accrued when he separates from the employer. The employer must provide this money to the employee within a “reasonable time” after the employee “demands” the money. For purposes of the law, “a reasonable time means the earlier of either the next day on which employees would regularly be paid or a day not more than 2 weeks after the day on which the demand is made.”
A union who represents workers at the Bucksport mill and some of the affected workers sued Verso because they claimed Verso refused to pay severance pay and accrued vacation pay within the required time periods. The Maine Department of Labor, Maine Attorney General, and another union have reportedly reached a settlement agreement with Verso over the payment of severance pay. But the union who filed the lawsuit, the International Association of Machinists and Aerospace Workers, has reportedly not agreed to the settlement. The settlement would reportedly allow Verso to pay half of the severance pay by January 8 and the rest in March. (This news report does not mention the payment of accrued vacation pay.)
If an employer violates the severance pay law or the law regarding timely payment of earned wages, including vacation time, it is subject to penalties that it must pay to the affected employees. Those penalties equal twice the amount of the money that the employer failed to pay. The International Association of Machinists and Aerospace Workers have reportedly balked at the settlement because it permits Verso to delay severance payments and does not require it to pay any penalty to the affected workers for the untimely severance payments.