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Overtime Rule Changes that Apply to Maine Employers
Maine state statute recognizes the exemption from overtime for people working in a "bona fide executive, administrative or professional capacity" and requires that employers pay a salary according to the requirements of the Federal Fair Labor Standards Act (FLSA).
Both Maine and federal law use a three-pronged test to determine if an employee is exempt from the overtime provisions of the law. The three prongs of the test are:
- The employee must be paid on a salary basis. This means an employee regularly receives a predetermined amount of compensation each pay period.
- The salary must exceed a certain salary threshold. In Maine, this salary threshold must exceed $38,250.
- The employee's job duties must meet certain tests. There are slightly different tests for the administrative, professional and executive exemptions.
Keep in mind:
- "Employer" includes not only businesses, but non-profits and governmental entities.
- “Salary” is a method of pay; paying a worker on salary does not mean that a worker is exempt from overtime.
As a first step, employers should review the job duties currently being performed by their employees—not only job titles or job descriptions—who fall into the salary range between the old and new exempt thresholds. Employers who have questions are encouraged to reach out to their employment compliance advisors.
As of January 1, 2023, the minimum salary amount is $796.17 per week or $41,401 per year for exempting a worker from overtime. This is only one of the factors used in determining whether a worker is exempt from overtime under federal or state law. The duties of each worker must be considered as part of this analysis. Failure to adhere to both requirements—meeting the duties test and the weekly salary threshold—will result in violations of both federal or state law or of one jurisdiction or the other depending on the discrepancies in the laws.
Most employers face making some compensation changes. A plan to meet these challenges should include: conducting an internal analysis of exempt positions, identifying options, and implementing a plan to minimize negative effects on employee relations, direct payroll costs, indirect administrative costs, and general operations. Routinely communicating with employees about what changes are being considered is encouraged.
If they haven’t done so already, employers are strongly advised to conduct their own classification analysis to review those employees for whom they currently claim overtime exemptions and decide whether to:
MDOL cannot provide legal guidance on which methodology an employer should use; however, our staff will provide employers with compliance assistance and outreach education to ensure compliance with these new requirements. Employers seeking legal guidance should contact employment compliance advisors.
Please note that the federal salary level and the federal exemption for highly compensated employees are not applicable under Maine law.
Exemption for Executive Employees Under the FLSA (29 CFR, Part 541.3)
Exemption for Administrative Employees Under the FLSA (29 CFR, Part 541.2)
Exemption for Professional Employees Under the FLSA (29 CFR, Part 514.3)
MDOL has several Wage and Hour Compliance Assistance classes scheduled all over the state and we are scheduling additional sessions over the next six months. If you are interested in attending a class, would like a class in your area, or have general overtime questions, please email email@example.com.
Q: What is "overtime"?
Q: What counts as “hours worked” for overtime?
Q: Who is entitled to overtime pay under federal and state labor laws?
Q: Is overtime due after eight hours worked in a day?
Q: In a bi-weekly pay period, is overtime due even when the employee only works 80 hours but worked more than 40 in one week?
Q: Because federal rules are changing, what employers are covered by the federal Fair Labor Standards Act (FLSA)? Which laws do I comply with as an employer in Maine?
In general, employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more are covered by the FLSA. In addition, employees of certain businesses are covered by the FLSA regardless of the amount of gross volume of sales or business done. These businesses include: hospitals, businesses providing medical or nursing care for residents, schools (whether operated for profit or not for profit), and public agencies.
*The state enforces similar minimum wage and overtime requirements regardless of the annual dollar volume of a business or industry. Any business in Maine with one employee or more is covered under state regulations.
Q: What happens when federal and state governments have differing overtime laws?
Q: What is the difference between overtime and compensatory time? Can I use comp time as a private sector employer in lieu of paying overtime?
Any employer, public or private sector, may allow a worker to adjust or flex his or her schedule within the work week so as not to go over 40 hours. For example, a worker who works 10 hours on Monday may be allowed to only work six hours on Friday within the same work week to keep the total hours at or below 40 for that same work week.
Q: Does checking email or taking a phone call after hours count as overtime?
When it comes to employees answering phone calls or checking email after hours, this is clearly work time and must be recorded and compensated as such. Employers should have clear policies that indicate which employees are allowed to perform work after hours and if employees violate the policy, they should be counseled for the violation of that policy but must still be compensated.
Q: My workers would like to volunteer their extra hours because we are a non-profit. Is that allowed?
Q: We own two different businesses and some of our employees work for both. How would this affect how we calculate overtime?
Q: I'm paid a salary and my job title is manager. Am I exempt from overtime pay?
Q: What are the significant changes to the overtime regulations for “white-collar” salaried workers?
Q: What determines whether an employee falls within one of the white-collar exemptions?
*Certain employees are not subject to either the salary basis or salary level tests (for example, doctors, teachers, and lawyers).
Q: How will the Maine Department of Labor automatically update the salary level?
Q: How will employers implement the updated salary level requirement established in this Final Rule?
The circumstances of each affected employee will likely affect how employers respond to the new salary level requirement. For example, employers may be more likely to give raises to employees who regularly work overtime and earn slightly below the new standard salary level in order to maintain their overtime-exempt status, thereby avoiding the overtime premium. For employees who rarely or almost never work overtime hours, employers may simply choose to pay the overtime premium whenever necessary. Employers should also review their policies to make sure that the policies related to overtime work are clear and consistent with the implementation of the rule changes.
All employers should begin discussing these choices and potential changes with their affected workers. Communicating with employees prior to the change going into effect will make the transition smoother. Some employees may view no longer being a salary exempt worker as a loss of status or as a demotion, even if their pay does not change. Others who will keep their exempt status may believe that they will be expected to pick up additional work that had been performed by others, and feel that they are being taken advantage of by being exempt from overtime. Again, communicating about the changes, setting clear expectations, and establishing clear policies will help both employers and employees navigate these changes.
Q: Are the federal and Maine Department of Labors making any adjustments to the standard duties tests?
Q: Must employees earning below the new level be converted to hourly pay?
Q: Will newly overtime-eligible employees have to record their hours on a daily basis or "punch a time clock"?
For employees with a flexible schedule, an employer does not need to require an employee to sign in each time she or he starts and stops work. The employer must keep an accurate record of the number of daily hours worked by the employee, not the specific start and end times. Thus, an employer could allow an employee to provide simply the total number of hours worked each day, including the number of overtime hours if any, by the end of each pay period.