Tip credit bill signed into law

AUGUSTA — A bill restoring the “tip credit” system for many service industry workers in the state was passed by the legislature last week and has been signed into law by Governor Paul LePage.

The tip credit allows an employer to consider tips earned by a service employee, like a server or bartender, as meeting part of the employer’s obligation to pay the standard minimum wage of $9 per hour.

Following a referendum question last fall, the minimum wage for tipped workers had been on track to increase $1 per hour every year until it reached the regular minimum wage. This bill, LD 673, deletes that language from state law and allow employers to continue to pay less than minimum wage provided that tipped workers make enough in tips to bring their take-home pay at least to the minimum. The bill does not affect the scheduled increase of the minimum wage to $12/hour by 2020.

The change is set to go into effect Jan. 1, 2018.

Rep. Brian Hubbell (D-Bar Harbor) was a co-sponsor of LD 673. He said this spring that, between the competing minimum wage initiatives last year, he declined to support the one brought by the state Chamber of Commerce because he saw it as an attempt to derail the original proposal by the Maine People’s Alliance and other groups that was eventually passed by voters.

In return, he promised constituents who are restaurant owners and workers that he would support a tip credit bill if the referendum passed.

“I hope that, with the restoration of the tip credit, the referendum’s advocates can still understand this as an important step forward for all Maine workers,” Hubbell said in March.

Sen. Brian Langley (R-Hancock County), himself a restaurant owner, also supported the change.


Liz Graves

Liz Graves

Reporter at Mount Desert Islander
Former Islander reporter and editor Liz Graves grew up in California and came to Maine as a schooner sailor.

Leave a Reply

Your email address will not be published.