Maine Minimum Wage Changes: The Bottom Line (Cont.)

April 8th, 2007 Posted by Mark

Tipped employees or regular employees, when that new federal minimum wage passes (or if it does), they probably will not see an impact, and their employers probably will not see the impact either. That is because Maine’s minimum wage will be higher than the federal minimum wage, even after the new law passes, through 2009, when the federal minimum wage would go up to $7.25 per hour and then be higher than the Maine minimum wage.

But up until that point, the Maine employers paying the minimum wage to their employees will have to pay the Maine minimum wage. As is the case with labor law, employers in any given state must pay the higher of the two minimum wages when the state and the federal minimum wage are not the same. In the case of Maine at present, the federal minimum wage is $5.15 per hour and the Maine minimum wage is $6.75 per hour, so you can do the math and see that the Maine minimum wage is the one to be paid.

This holds true even for employers who are liable to follow the Fair Labor Standards Act. These employers also have to pay the higher Maine minimum wage, despite having to follow the other federal labor regulations contained in the Fair Labor Standards Act.

When and if the federal minimum wage goes up to $5.85 per hour in its three part increase, the Maine employers out there paying the minimum wage will still be required to pay the higher Maine minimum wage. And when the federal minimum wage goes up to $6.50 per hour sometime in 2008, as prescribed by both federal minimum wage bills in Congress at the moment, the Maine minimum wage would still be higher, and thus be the one that employers have to pay.

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Maine Minimum Wage Changes: The Bottom Line

April 8th, 2007 Posted by Mark

For Maine employers then, the new minimum wage is old news, as is the fact that they had to get a new Maine minimum wage poster. Of course, if you haven’t gotten your updated Maine minimum wage labor law poster, I would strongly recommend doing so now, before they catch you. Technically, when the new Maine minimum wage went into effect this past October, you should have had the poster on the wall.

This Maine minimum wage poster will still be good for this coming October, too, when the Maine minimum wage goes up again to $7 per hour. That is because the new Maine minimum wage poster—which I am looking at at this very moment—contains details about the two part minimum wage increase, with the two increases occurring in October of 2006 and 2007.

The Maine minimum wage poster also contains info on so called service employees, or tipped employees. The state considers any employee that makes more than $20 per month in tips a service, or tipped, employee. And as such, employers in the state of Maine, according to the Maine minimum wage law, can pay these workers half of the regular minimum wage, as long as the other half is made up for by the tips that they receive.

If the worker’s tips do not make up the difference in any given week, then you the employer must make up the difference. This system is quite similar to how tip credits work in the other states that we have looked at, though some states do have a system now were they set a definite wage rate for tipped employees (whereas Maine here has set a proportionate rate of 50 percent for the tip credit). The significance? When Maine’s minimum wage goes up in October again, the service employee minimum wage will go up too.

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Maine Minimum Wage Changes (Cont.)

April 8th, 2007 Posted by Mark

This relatively new Maine minimum wage came to employers by way of a new law that the governor, Gov. John Baldacci, signed into law just right around this time of year, last April 13. The governor back then signed the bill with the intent, he said, to make sure that Maine kept pace with the rest of New England when it comes to the minimum wage, according to my sources.

The new minimum wage of $6.75 per hour went into effect, as I said, this past October, and you Maine employers will also have another new minimum wage increase coming up this October 2007. That minimum wage increase will raise the Maine minimum wage to $7 per hour, following with the two step increase process that was in the bill from last April.

This Maine minimum wage increase did not come easy for supporters in the state. Opponents of the minimum wage said it would hurt the smaller employers in the state, and then lead to fewer jobs in the long run for workers. These are the main two arguments that minimum wage opponents use to argue against any sort of increase.

Meanwhile, back last spring in Maine, the supporters of the new minimum wage used much of the same arguments that supporters of all minimum wage increases tend to use, which is that employees who get paid the old minimum wage get poorer by the year because of the effects of inflation—the economic force that increases prices on food, fuel, clothing, and many other household items year after year.

The law eventually did pass over the opposition, and Maine got its new minimum wage, which does put it in the middle of the pack of New England states. Connecticut, Vermont, and Rhode Island all have minimum wages over $7 per hour already, and Massachusetts has one close to it.

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Maine Minimum Wage Changes

April 8th, 2007 Posted by Mark

Here is one of the newest developments in the Maine minimum wage law, news that just took place this past week. So listen up, you Maine employers out there! The new law clarifies the type of wages employers must pay so called domestic workers. The bill was signed into law by Gov. John Baldacci just two Thursday ago, so it is the law of the land now.

What it does is make it so that domestic employees must be classified as either working individually, or working for a company. If they are working on their own—say, like a maid or a babysitter working for you at your home—then they are still not required to be paid the minimum wage or overtime, according to the new law.

However, if these domestic workers work for a domestic worker service company, an employer that has many domestic employees on their pay roll and is in charge of sending out these domestic employees to their many clients, then they are not exempt from the state’s minimum wage and overtime laws. The bill was introduced by Rep. Ann Haskell, a Democrat from the city of Portland, Maine.

The bill is currently making its way through the Department of Labor in the state, which according to my sources, has no issue with the new way of doing things. The Department will make sure to start enforcing this new law, so if you happen to be an employer running a domestic employee service, I would suggest you check your payment rate to your employees to see if you follow this new minimum wage law in Maine.

Other employers out there in Maine, the same minimum wage that you have been paying since this past October, when the state minimum wage went up from $6.50 per hour to $6.75 per hour.

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Maine Minimum Wage Changes (Cont.)

February 5th, 2007 Posted by Mark

So, Maine employers, you’re getting ready for that new minimum wage we talked about in your state. You have you new Maine minimum wage labor law posters hanging in your work sites, somewhere that all of your workers can have access and read them whenever they want to, right? This past October, you started paying your lowest paid workers the proper new minimum wage of $6.75 per hour, and then this coming October 2007, you will start to pay them the minimum wage of $7 per hour.

But what happens if the federal government decides in the meantime to pass its own new minimum wage law? Simple, for starters, you will need to pick yourself up a new updated federal minimum wage labor law poster, here at our parent site, for instance, at LaborLawCenter.com.

Beyond that, though, what will the new federal minimum wage law hold for you? The truth of the matter is that it won’t mean too much for Maine employers until 2009. That’s because the first federal minimum wage increase proposed by the new congressional bill, set to kick in 60 days after the President signs the bill, would lift the minimum wage to $5.85 per hour. That is lower than the current $6.75 per hour Maine minimum wage, so the Maine employers, you would have to pay the higher state wage.

Then a year later, the federal minimum wage would increase to $6.55 per hour, which will be lower than the Maine minimum wage in 2008, which will be $7.00. Only a year after that—in 2009—could the federal minimum wage overtake the Maine minimum wage, when the federal minimum wage increases to $7.25. If that wage rate is higher than the Maine minimum wage in 2009, then Maine employers who follow the Fair Labor Standards Act will have to pay the federal wage rate to their employers.

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