Maine's minimum wage increases to $14.65 per hour in 2025

AUGUSTA – The state minimum wage for Maine will increase from $14.15 to $14.65 per hour on Jan. 1, 2025, based on data recently made available by the U.S. Department of Labor's Bureau of Labor Statistics.

Maine law, amended by a citizens’ referendum in 2016, requires annual adjustments to the minimum wage based on the cost-of-living index (CPI-W) for the Northeast Region. Between August 2023 and August 2024, there was a 3.6 percent increase in the CPI-W.

In addition to the minimum wage, the new "tip wage," or service employee minimum wage, in 2025 will be $7.33 per hour. This means that service employees must receive at least a direct cash wage of $7.33 per hour from the employer.

The employer must be able to show that the employee receives at least the minimum wage of $14.65 per hour when the direct wage and tips are combined at the end of the week.

The amount of tips which are necessary to qualify as a service employee will also increase from $179 per month to $185 per month.

The minimum salary threshold for exempting a worker from overtime pay must exceed 3,000 times the state's minimum wage or the annualized rate established by the US Department of Labor, whichever is higher. Starting Jan. 1, 2025, the US Department of Labor rate will be higher, therefore, the new minimum salary threshold will be $1,128 per week, or $58,656 per year.

This is only one of the factors used in determining whether a worker is exempt from overtime pay under federal or state law. An individual can earn more than the minimum salary threshold and still be eligible for overtime.

The duties of each worker must be considered as part of this analysis.

Employers can download the required minimum wage poster at no cost on the Department's website: https://www.maine.gov/labor/posters/index.shtml

The minimum wage and overtime law can be found here: http://legislature.maine.gov/legis/statutes/26/title26sec664.html.

The Department also has more information available on its website at https://www.maine.gov/labor/labor_laws/wagehour.html

As a reminder, the U.S. Department of Labor’s new overtime rules took effect in July regarding exemptions for executive, administrative, professional, outside sales, and computer employees.

Revisions to that law include increases to the standard salary level and the highly compensated employee total annual compensation threshold, and a mechanism for the updating of these earnings thresholds to reflect current earnings data.

Employees are exempt from the Fair Labor Standards Act's minimum wage and overtime protections if they are employed in a bona fide executive, administrative, or professional capacity, as those terms are defined in the department's regulations.

To fall within the EAP exemption, an employee generally must meet three tests including being paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed; be paid at least a specified weekly salary level; and primarily perform executive, administrative, or professional duties.

The Department's regulations also provide an alternative test for certain highly compensated employees who are paid a salary, earn above a higher total annual compensation level, and satisfy a minimal duties test.

More information on the rule can be found on the U.S. Department of Labors website: https://www.dol.gov/agencies/whd/overtime/rulemaking <