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December 2, 2016

Here's how Maine's new minimum wage levels will impact OT pay

Courtesy / Matthew Gagnon, Wikimedia Commons
Courtesy / Matthew Gagnon, Wikimedia Commons
Maine Gov. Paul LePage, who has been vocal in his opposition to the minimum wage increase and a tax on some of Maine's highest earners that will established a fund that supports K-12 public schools, is balking at validating those and other measures approved by Maine voters on Election Day.

Maine's Department of Labor is alerting Maine employers that the minimum wage increase approved by Maine voters in the Nov. 8 election will have an impact on the salary threshold for determining overtime eligibility under the state's employment rules.

Julie Rabinowitz, director of policy, operations and communication for the Maine DOL, told Mainebiz that although the federal DOL's new overtime rules that were slated to take effect on Dec. 1 are in legal limbo after a federal judge in Texas authorized a temporary injunction late last month, Maine's separate overtime regulations will have some bearing on Maine employers' OT responsibilities once the results of the Nov. 8 vote have been proclaimed as official by Gov. Paul LePage.

"Although the minimum wage referendum language set the effective date of the new Maine minimum wage as Jan. 1, 2017, it technically cannot go into effect until 30 days after the governor has certified the election results," Rabinowitz said in a written response to questions posed by Mainebiz.

"The increase in the minimum wage will require that employers pay not only the higher minimum wage to workers, but also pay more when a worker earns overtime, which is mandated to be at least time-and-one-half the straight-time (hourly) rate. So, a worker currently earning $8 per hour straight-time would have earned $12 per hour overtime for all hours more than 40 in the same work week (not pay period).That will go up to $9 straight and $13.50 overtime [30 days after the minimum wage vote is certified]."

LePage balks at validating referendum votes

That seems straightforward enough, but Gov. Paul LePage hasn't yet validated Maine Secretary of State Matthew Dunlap's Nov. 28 certification of Maine's recent election results — which puts the state's own OT regulations in a kind of legal limbo as well.

As reported today by both the Bangor Daily News and Portland Press Herald, LePage has sent newly elected legislators a form letter saying he "cannot attest to the accuracy" of Maine's recent election results, an allegation strongly disputed by Dunlap.

The Press Herald reported that Maine law requires the Secretary of State's Office to certify the results of the election within 20 days, which Dunlap fulfilled on Nov. 28, and that LePage has 10 days to review the submission and issue proclamations summoning lawmakers to their swearing-in ceremonies and announcing the official results of any ballot questions. His letter Wednesday summons newly elected lawmakers to show up on Dec. 7 for their swearing-in ceremony but gives no indication he plans to validate Dunlap's certification of the Nov. 8 votes within the stipulate 20-day requirement.

Both newspapers report that LePage's spokeswoman, Adrienne Bennett, had not responded to their requests for further information about the governor's concerns about the Nov. 8 vote results.

New salary thresholds under Maine rules

Rabinowitz said the passing of the ballot initiative raising Maine's minimum wage also sets a new state salary threshold for working in a "bona fide executive, administrative or professional capacity."

Maine statute requires that an individual qualifying for the overtime exemption be paid the higher of either 3,000 times the minimum wage or the salary specified in the federal Fair Labor Standards Act. With the federal rule in limbo, Rabinowitz said the 3,000 times the new $9 minimum wage will be higher than the current federal threshold of $23,660.

"Once the state minimum wage law goes into effect, the minimum salary to qualify must meet the state threshold $519.24 per week," she wrote, noting that 3,000 times the new minimum wage of $9 per hour would total $27,000 per year.

Rabinowitz also noted that the state's salary threshold will be tied to each subsequent increase in the state's minimum wage stipulated in the referendum question, which calls for annual $1 increases up to $12 in 2020, and annual cost-of-living increases thereafter.

Rabinowitz said if Maine employers had already made changes to meet the original Dec. 1 timeline of the federal rule the would already be in compliance with the state changes required by the new minimum wage.

"As we stressed earlier, employers should be focusing on the duties of the workers as the primary test as to how they can be classed as hourly or exempt," she wrote. "If the federal rule is upheld and just goes into effect at a later date, then employers would also be prepared for that situation."

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