Overtime bill and “for cause” termination proposals slated for week of March 22
Two of the most significant labor bills of this session have been scheduled for public hearing before the Joint Standing Committee on Labor and Housing. Both bills would considerably alter the business landscape in Maine by adding significantly to the cost of doing business here and by making the state an outlier to nearly every other state in the country. If either bill or, even worse, both bills pass, the impact on the business environment here would be nothing short of catastrophic.
Sponsored by Rep. Rachel Talbot Ross (D-Portland), LD 607, An Act to Restore Overtime Protection for Maine Workers, receive its public hearing on Monday, March 22, sometime after 10:00 a.m. This same proposal was submitted in the 129th Legislature as LD 402. As drafted, the bill proposes to increase the overtime threshold by $18,774 during a four-year period, finally landing at $55,224 by 2024. The threshold would then be indexed each year thereafter by the second quartile of usual weekly earnings for employed full-time wage and salary workers as published by the United States Department of Labor’s Bureau of Labor Statistics. Given the tenuous situation many small businesses find themselves in due to the year-long pandemic, adding this level of cost onto their bottom line would likely mean the end of many, and would result in a profoundly negative impact in the way many would need to conduct their business going forward.
Referred to as the “overtime” or “salaried” threshold, it is the monetary dividing line between employees who are considered salaried/exempt for the purposes of overtime pay, and those who are hourly/non-exempt workers and therefore eligible for overtime pay after working 40 hours in a week. As drafted, LD 607 would increase Maine’s threshold from its current level of $40,408 in 2022, then increase it again to $47,816 in 2023, and finally to $55,224 in 2024.
Since 2009, Maine’s monetary dividing line separating hourly/non-exempt and salaried/exempt has been tied to changes in Maine’s minimum wage. At that time, Title 26 was amended to create a threshold that is 3,000 times the state’s minimum wage. While the federal threshold is currently set at the newly established threshold of $35,568, Maine’s threshold has climbed to its current level of $36,450 – again tied to the most recent increase in the minimum wage as indexed by changes to the Consumer Price Index (CPI) effective on January 1, 2021, when Maine’s minimum wage increased by an additional 15 cents to $12.15 an hour. Therefore Maine’s “threshold” is already over the federal level and will continue to climb each year, even if nothing is done in public policy.
Last session, the Maine State Chamber lead a coalition of more than 30 statewide business associations in strong opposition to the bill. Due to the global pandemic and its impact on Maine’s small businesses, passage of LD 607 would be nothing short of devastating. Maine businesses are struggling just to survive, setting aside any attempt to prosper. For many, it would most certainly be the final straw, leading to numerous business closures and job losses.
Furthermore, LD 607 would be on top of other government mandated workplace changes that have taken place here during the past 12 months – including as noted earlier, another increase in Maine’s minimum wage and the added cost of providing up to 40 hours a year in paid time off (PTO) for all full- and part-time employees in businesses with more than 10 workers, that started in January of this year.
An End to Maine’s “At Will” Employment Status…
Sponsored by Labor and Housing committee’s House chair, Rep. Mike Sylvester (D-Portland), LD 553, An Act to End at Will Employment, is the only bill scheduled for public hearing beginning at 10:00 a.m. on Wednesday, March 24. The bill would dramatically restructure Maine’s current workplace employment law regarding employee discharges. The bill will eliminate the current, limited, or regulated “employment-at-will” status under which Maine business of all sizes currently operate and replace it with a requirement of “just cause” when terminating an employer/employee relationship.
The bill will require an employer to adopt a three-step disciplinary process for any termination that includes an initial verbal warning, followed by two written warnings. Each step must be clearly documented in writing. Only after the final written warning (the fourth violation) can an employee be disciplined or discharged. The disciplinary process can be one developed by the employer or one adapted from a model policy the Maine Department of Labor will be tasked with drafting.
Maine has operated in an employment-at-will environment for more than 50 years. This law provides that, in the absence of a contract for a definitive timeframe, an employer may dismiss an employee for any reason. Likewise, an employee has the same right to terminate his or her employment-at-will. While this may sound straight forward, it is not. The state of Maine and the federal government provide a variety of protections for employees, which limits an employer’s right to discharge. These include the Maine Human Rights Act, the Workers’ Compensation Act, the Whistle Blowers’ Act, and the Americans with Disabilities Act. Additionally, there are protections found under the National Labor Relations Act and the federal Civil Rights Act.
This policy issue has been debated by the Legislature in various forms and approaches in the past and rejected each time. For obvious reasons, the Maine State Chamber will testify in strong opposition to both of these bills. As indicated earlier, passage of either proposal would be devastating for Maine businesses and the economy – especially as we work to recover from the effects of the pandemic.
We encourage our members, or any concerned business, to sign up to testify virtually. The following link will provide you with the necessary information with which to sign up and/or submit written testimony: https://www.mainelegislature.org/testimony/. Legislators need to hear from you concerning these two bills.
For questions or additional information, please contact Peter Gore by calling either (207) 623-4568, ext. 107, or (207) 458-0490, or by emailing firstname.lastname@example.org.