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Maine's Minimum Wage to Increase to $14.65 Per Hour in 2025
September 11, 2024
For Immediate Release: September 11, 2024
Maine's Minimum Wage to Increase to $14.65 Per Hour in 2025
AUGUSTA - Pursuant to Maine law (Maine statute Title 26, chapter 7, section 664), effective January 1, 2025, the state minimum wage will increase from $14.15 to $14.65 per hour, based on data recently made available by the U.S. Department of Labor's Bureau of Labor Statistics. Maine law, amended by citizens referendum in 2016, requires annual adjustments to the minimum wage based on the cost-of-living index (CPI-W) for the Northeast Region. Between August 2023 and August 2024, there was a 3.6 percent increase in the CPI-W.
In addition to the minimum wage, the new "tip wage," or service employee minimum wage, in 2025 will be $7.33 per hour. This means that service employees must receive at least a direct cash wage of $7.33 per hour from the employer. The employer must be able to show that the employee receives at least the minimum wage of $14.65 per hour when the direct wage and tips are combined at the end of the week. The amount of tips necessary to qualify as a service employee will increase from $179 per month to $185 per month.
The minimum salary threshold for exempting a worker from overtime pay must exceed 3,000 times the State's minimum wage or the annualized rate established by the US Department of Labor, whichever is higher. Starting January 1, 2025, the US Department of Labor rate will be higher, therefore, the new minimum salary threshold will be $1,128 per week, or $58,656 per year. This is only one of the factors used in determining whether a worker is exempt from overtime pay under federal or state law. An individual can earn more than the minimum salary threshold and still be eligible for overtime. The duties of each worker must be considered as part of this analysis.
Employers can download the required minimum wage poster at no cost on the Department's website: https://www.maine.gov/labor/posters/index.shtml
The minimum wage and overtime law can be found here: http://legislature.maine.gov/legis/statutes/26/title26sec664.html . The Department also has more information available on its website at https://www.maine.gov/labor/labor_laws/wagehour.html
Reminder: New USDOL Overtime Rule Went into Effect July 1
On July 1, 2024, the U.S. Department of Labor's final rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees - https://www.federalregister.gov/documents/2024/04/26/2024-08038/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and , went into effect.
The final rule updates and revises the regulations issued under section 13(a)(1) of the Fair Labor Standards Act implementing the exemption from minimum wage and overtime pay requirements for executive, administrative, and professional (EAP) employees. Revisions include increases to the standard salary level and the highly compensated employee total annual compensation threshold, and a mechanism for the updating of these earnings thresholds to reflect current earnings data. While this new rule will take effect in Maine, Maine law does not have an exemption from overtime for highly compensated employees.
Employees are exempt from the Fair Labor Standards Act's minimum wage and overtime protections if they are employed in a bona fide executive, administrative, or professional capacity, as those terms are defined in the Department's regulations at 29 CFR part 541.
To fall within the EAP exemption, an employee generally must meet three tests:
- be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed;
- be paid at least a specified weekly salary level; and
- primarily perform executive, administrative, or professional duties, as provided in the Department's regulations.
The Department's regulations also provide an alternative test for certain highly compensated employees who are paid a salary, earn above a higher total annual compensation level, and satisfy a minimal duties test.
The final rule increases the standard salary level and the highly compensated employee total annual compensation threshold on the rule's effective date on July 1, 2024, and on January 1, 2025, when changes in the methodologies used to calculate these levels become applicable. The final rule also provides for future updates of these levels every three years to reflect current earnings data.
How does this affect Maine?
The EAP exemption in Maine law states that Maine adopts the federal EAP salary threshold if it is higher than the Maine-based threshold.
- The new minimum salary as of January 1, 2025, will be $1,128 per week
More information on the rule can be found on the U.S. Department of Labors website: https://www.dol.gov/agencies/whd/overtime/rulemaking