AUGUSTA – The Maine Department of Labor (MDOL) has announced that effective Jan. 1, the state minimum wage will increase from $12 to $12.15 per hour, based on data recently made available by the U.S. Department of Labor’s Bureau of Labor Statistics.
This increase, as prescribed by state law, requires annual adjustments to the minimum wage by the cost-of-living index beginning in 2021. This follows $1 annual increases to the minimum wage each of the past three years.
Data indicates that approximately 78,000 Maine workers earned a wage less than $12 per hour in 2019, when the minimum wage was $11 per hour.
“In 2016, the citizens of Maine overwhelmingly voted to increase the state’s minimum wage incrementally to $12 an hour, and then index it annually,” said Commissioner Laura Fortman. The modest 15 cent increase in 2021 will help the minimum wage keep pace with the cost of living and preserve the wage floor for minimum wage workers. According to a study conducted by MDOL in 2017, most workers in Maine earning minimum wage were 25 years old or older, and two thirds were women.
In addition to the minimum wage itself, the department has calculated the new tip wage, or service employee minimum wage, in 2021 to be $6.08 per hour. This means that service employees must receive at least a direct cash wage of $6.08 per hour from the employer. The employer must be able to show that the employee receives at least the minimum wage of $12.15 per hour when the direct wage and tips are combined at the end of the week.
The minimum salary threshold for exempting a worker from overtime pay is also based on the minimum wage. Starting Jan. 1, the new minimum salary threshold is $700.97 per week or $36,450 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. The duties of each worker must be considered as part of this analysis.