Happy New Year! We are officially 24-days into the modern 20s, and it’s time for your friendly lawyerly reminder that the Federal Department of Labor (DOL)’s “Final Rule” on overtime pay (that was announced in September of last year) took effect on January 1, 2020. Perhaps more importantly, Maine’s minimum wage went up to $12.00 an hour on the 1st.
Click here for a free poster from the Maine Department of Labor (MDOL.)
What does this mean for Maine employers? The new federal DOL rule raises the minimum amount that must be paid to salaried employees in order to keep them exempt (that means, so you don’t have to pay them overtime) from $455 per week to $684 per week. However, with the new minimum wage rate increase in Maine, our state’s salary requirement will be $692.31 per week. This is because Maine 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 Fair Labor Standards Act (FLSA), whichever is higher” (26 MRS §663(3)(K)).
To avoid paying overtime to exempt employees in 2020, Maine employers must:
- Pay them at least $692.31 per week; AND
- Have them performing exempt work; AND
- Follow the “salary test” or “salary basis,” which generally means no deductions from that salary each week because the employee earns a predetermined amount each pay period.
For more information, the Maine DOL has great tools and resources on overtime changes here: http://www.maine.gov/labor/labor_laws/overtime.html.
This article is not legal advice but should be considered as general guidance in the area of employment and corporate law. Amy Dieterich, James F. Pross, and Jordan Payne Hay, 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.