Annual increases in Maine’s minimum wage automatically increase the overtime threshold… Using the current minimum wage of $12.75, which is annually indexed and will likely be higher each year, the Majority Report increases the overtime payment salary threshold to 4,500 times Maine’s minimum wage: 2022 3,000 x $12.75 = $38,250 2023 3,500 x $12.75 = $44,625 2024 4,000 x $12.75 = $51,000 2025 4,500 x $12.75 = $57,375 Maine’s salary threshold increased from $36,450 in 2021 and to $38,250 in 2022, thanks to the 6% increase in Maine’s minimum wage that became effective on January 1, 2022. The federal threshold is currently $35,568 – so Maine is already well above that and will only continue to increase each year, even without the passage of LD 607. Even with modest annual increases in the minimum wage, the overtime salary threshold would likely exceed $60,000 in 2025. LD 607 makes Maine even more of a national outlier… The overtime salary threshold issue first surfaced at the Statehouse in the 129th Legislature. Maine is one of only five states – California, Colorado, Maine, New York, and Washington – that have their own salary threshold above the federal level. All other states follow the federal salary threshold. Maine should wait for new federal rules update… The U.S. Department of Labor plans to propose an update to federal overtime rules this spring. New federal rules will place Maine employers on equal footing with other states. In conjunction with new federal rules, LD 607 will cause unwarranted confusion and more costs for employers. The amount of this steep new expense is unknown… It is anticipated that thousands of salaried employees will fall into the new overtime category. However, the Maine Department of Labor has not yet ascertained the actual number of affected workers and employers in this new category. LD 607 creates burdensome paperwork and oversight… Many salaried employees will be forced to keep timesheets of hours worked. Newly-affected salaried workers may be required to turn in company phones, tablets, computers so that the employer does not get hit with overtime expenses and labor law violations. Employers will also be required to keep more records of work hours and whether the overtime was authorized LD 607 interferes with salaried employees’ work flexibility and takes away career advancement efforts… Workers reclassified from salaried to hourly may experience reduced opportunity, and those salaried employees may lose the ability to work flexible hours. Career advancement efforts of salaried workers – to “go the extra mile” or do more than requested – may be stunted by concerns about potential overtime costs to employers. Morale among salaried employees may suffer as they lose work flexibility or are reclassified as hourly workers. LD 607 presents higher costs for small businesses, non-profits, and social services… Many small employers will be squeezed between higher costs and their customers’ willingness to pay. Prices are already skyrocketing, and businesses can only raise the price of their products or services so much before it impacts purchasing. Many non-profits will be squeezed between higher costs and limited donor dollars; many social services will be squeezed between higher costs and tight reimbursement levels. Employers operating on fixed or limited budgets will face harsh choices on cuts to staffing, programming, and services. LD 607 sets arbitrary salary thresholds without Maine DOL’s analysis of Maine workforce or economic impact… There has been no analysis of the workforce to justify the new salary thresholds outlined in LD 607 – no analysis of the financial impacts on the public, private, and non-profit sectors, and no economic analysis of the impacts on the Maine economy. LD 607 does not consider the effect on implementing more automation or customer self-service in lieu of jobs. Given the widespread impacts and costs, the lack of any analysis and justification from the Maine Department of Labor, and the U.S. Department of Labor’s announcement that will propose changes in federal overtime salary rules this spring, we strongly urge OUGHT NOT TO PASS on LD 607. Maine employers can’t successfully plan to recover from the challenges brought by the pandemic if they are being buffeted by arbitrary, costly, and ill-timed changes in the current overtime payment salary threshold. Let Maine employers focus on recovering from the pandemic’s economic shocks, recruiting and hiring workers, and a host of other current challenges. Please contact your legislators and urge them to oppose the costly overtime legislation in LD 607. For additional information or questions, please contact Peter Gore by calling (207) 623-4568, ext. 107, or by emailing [email protected]. Business Associations Participating in the 2022 Coalition to Oppose the Overtime Salary Bill Updated 02/17/2022
Maine Employers Participating in the 2022 Coalition to Oppose the Overtime Salary Bill
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