State officials are giving employers in Maine until Jan. 7 to comply with a new overtime pay standard resulting from the minimum wage increase passed by voters.
The state standard is different from the new federal standard, which has been delayed by a court challenge.
Maine’s overtime pay requirement, set by state statute, says qualifying salaried employees cannot be exempted from receiving overtime pay unless their annual salary exceeds 3,000 times the state’s hourly minimum wage. At the current minimum wage of $7.50 an hour, that threshold is $22,500 a year.
However, Maine voters approved a statewide minimum wage increase on Nov. 8 that takes effect Jan. 1, when the minimum wage will be increased to $9 an hour. By 2020, it will be raised to $12 an hour.
As a result, the annual salary threshold for overtime pay exemption in Maine will increase to $27,000 in January. That means certain salaried employees must be paid 1.5 times their regular pay for work over 40 hours a week if their salaries fall below the new threshold. It will continue to increase each year until 2020, when the threshold will become $36,000.
Gov. Paul LePage said in a Maine Department of Labor news release that employers in the state need extra time to comply with the new standard.
“Many employers and employees are unaware of the relationship between the minimum wage in Maine and the minimum salary that an exempt worker must be paid, and many legislators have announced a bill to restore the tip credit (which lowers the minimum wage for workers who rely on tips),” LePage said. “It is entirely appropriate for the Department of Labor to take time to help employers and workers understand and comply with the law without taking them to task.”
In May, President Obama announced a new overtime pay requirement that would raise the salary threshold for exempt workers to nearly $47,500 nationwide.
The new standard was scheduled to take effect Dec. 1, but a federal court in Texas ordered the change to be suspended pending the results of a legal challenge. The case is still being litigated.
J. Craig Anderson can be contacted at 791-6390 or at:
Twitter: @jcraiganderson
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