Maine could boost overtime pay for workers

(The Center Square) — Thousands of Maine workers could get a big boost in overtime pay under a proposal working its way through the state Legislature, which is facing pushback from business groups who say the plan would hurt the state’s employers.

The Democratic proposal, recently approved by the Legislature’s Committee on Labor and Housing in a 6 to 4 party-line vote, would gradually increase the threshold employees are paid yearly to be exempt from overtime pay to $55,000 a year by next January. It would also index future increases to the rate of inflation.

The bill’s primary sponsor, state Sen. Mike Tipping, D-Penobscot, said it would boost pay for thousands of Maine workers who aren’t currently eligible for overtime compensation.

“Overtime pay rules used to be a reliable way to ensure that the majority of middle- and working-class Americans would either make it home in time to see their families or be compensated fairly by their employer for working beyond the 40-hour standard week,” Tipping in a recent statement.

Tipping points to labor and employment data show that in 1977 at least 66% of salaried employees in Maine benefited from the overtime pay law.

“Today in Maine, that number is just 13%,” he said. “This plummet is due in a large part to the fact that the threshold to determine who is eligible for these protections has not kept up with inflation.”

But business groups strongly oppose the move, arguing that it will hurt businesses struggling to regain ground in the wake of the pandemic and ultimately drive up consumer costs.

Labor leaders say the move to raise the overtime floor is long overdue and would also benefit supervisors and low-level managers whose jobs currently qualify them as overtime-exempt.

“Working people should be compensated for their labor and should not be expected to work for free,” Adam Goode, political director of the Maine chapter of the AFL-CIO, said in a statement. “If you are currently an assistant store manager at Dollar General or Best Buy and you make $44,000 a year, you could very well be working 50 hours a week. This means you are working 10 hours each week for free.”

David Clough, Maine state director of the National Federation of Independent Business, said the changes would put Maine among a handful of states that allow overtime threshold higher than the federal level. He said the impact on employers could be “significant” and would drag on the state’s economic recovery.

“Cost impacts on affected small employers will occur at a time many employers are still recovering from sudden and severe economic shockwaves that pulsed through the Maine economy during the coronavirus pandemic,” he said.

The state’s current overtime threshold is about $41,000 annually. Workers who don’t earn this amount have to be paid overtime, even if they’re classified as managers or professionals. By comparison, the federal overtime threshold is $35,568 a year, or $684 a week.

A rule proposed last year by the U.S. Department of Labor would allow most workers earning less than $55,068 to receive overtime, impacting about 3.6 million additional workers nationwide, according to the federal agency.

In 2019, then-President Barack Obama significantly increased the federal threshold to $47,476 a year, but the federal courts blocked the move following a challenge by national business groups.