Beginning January 7, 2017, employers must do more than raise the hourly pay of non-exempt employees to $9 in order to comply with Maine’s new minimum wage statute. They must also review the classification of employees under the “white collar” exemptions for compliance with Maine’s increased minimum salary requirement.
Increase in Minimum Salary for Maine “White Collar” Overtime Exemptions
The salary required for “white collar” overtime exemptions under Maine law must exceed 3,000 times the Maine minimum wage or the minimum salary required under the federal Fair Labor Standards Act, whichever is more. Although a Texas court has enjoined the federal rule that would have raised the minimum salary required for the federal overtime exemption from $455 per week ($23,660 for a full-year worker) to $913 per week ($47,476 for a full-year worker), because of the Maine minimum wage increase – beginning January 7, 2017 – Maine’s minimum salary required for the white collar overtime exemptions has increased from $22,500 to $27,000 a year.
Automatic Increases and Phase Out of Tip Credit
The Maine minimum wage will increase to $10 per hour in 2018; to $11 per hour in 2019; and to $12 per hour in 2020. After that it will rise at the rate of inflation. With each increase in the minimum wage, the minimum salary required to maintain the exemption for “white collar” workers will also increase, to $30,000, $33,000, $36,000, and then by inflation. The minimum cash wage required for tipped employees is $5 per hour in 2017 and, like the minimum wage, will rise by $1 each year until it reaches the annually adjusted minimum wage, at which point the tip credit will be eliminated altogether. The Legislature will consider during the current session whether to restore the tip credit.
New Minimum Wage Poster
The Department of Labor has updated the required poster to reflect the changes effective January 7, 2017. Employers should download the poster, which is available at http://www.maine.gov/labor/posters/172017minimumwage.pdf and place it in the workplace where workers can easily see it.
Although Maine’s wage payment statute requires employers to keep accurate records of hours worked and wages paid for only the past three years, employers are well-advised to retain such records for six years, which courts have held is the statute of limitations applicable to wage payment claims arising under Maine law.