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Jan 10, 2017

Pay Up: New Maine Minimum Wage Affects Salaried Employees


Category: Employment

 

On January 7, Maine's new minimum wage went into effect. That meant that hourly workers had to be paid at least $9 an hour as of that day. The new minimum salary requirement will be $519.24 per week, up from the federal minimum of $455 per week. State law requires that overtime-exempt employees be paid an annual salary that "exceeds 3,000 times the State's minimum hourly wage or the annualized rate established by the United States Department of Labor under the federal FLSA, whichever is higher" (26 MRS §663(3)(K)). This is under state law. So, even though those federal regulations that everyone was upset about are currently stalled, in Maine we have to raise the weekly amount for salaried employees to $519.24. To avoid paying overtime to exempt employees, employers must now 1) pay these employees at least $519.24 a week; 2) have them perform exempt work; and 3) follow the "salary test" (which generally means no deductions from that salary each week).

Hourly employees can be paid by several different methods, including by salary, although paying them salary makes it more complicated to figure out how much they should be paid for overtime hours. The Maine DOL has useful guidance at http://www.maine.gov/labor/labor_laws/overtime.html regarding different pay methods allowed under state and federal law. Compensatory or "comp" time cannot be used by private-sector employers, although private-sector employers can allow employees to flex their time within the work week (but not the pay period if the pay period is longer than a seven day cycle). In the area of wage and hour law, each week stands alone.

And take advantage of those state resources! Employers with questions about the law can visit the DOL's webpage on the minimum wage at http://www.maine.gov/labor/labor_laws/minimum_wage_faq.htmlGuidance on overtime exemptions is at http://www.maine.gov/labor/laborlaws/overtime.html. You can always call (207) 623-7900 for advice as well. The DOL is particularly helpful when it comes to state agencies and very "customer" friendly in terms of wanting to help.
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This article is not legal advice but should be considered as general guidance in the area of employment and corporate law.  Bryan Dench, Amy Dieterich, Jordan Payne Hay, and Rebecca Webber are employment and labor law attorneys; others at the firm handle business and other matters.  You can contact us at 207-784-3200.   
Skelton Taintor & Abbott is a full service law firm providing legal services to individuals, companies, and municipalities throughout Maine.  It has been in operation since its founding in 1853