Maine Could Finally Expand Overtime Pay For Thousands Of Workers

By Dan Neumann, Maine Beacon:

A Maine lawmaker has introduced legislation that would make thousands of more workers eligible for overtime pay when they work over 40 hours.

Right now, the salary threshold in Maine for being exempt from overtime protections is just $41,400 a year, meaning that if a salaried worker makes more than that, they don’t automatically qualify for time-and-a-half overtime pay.

LD 513, sponsored by Sen. Mike Tipping (D-Orono), would raise Maine’s overtime threshold to $62,100 by 2026. The measure would peg the threshold to 4,500 times the state’s minimum hourly wage, which is currently $13.80 and increases each year to keep pace with inflation.

“This change would begin to bring overtime protections back to where they’re supposed to be,” Tipping (who founded Beacon but is no longer editorially involved) told members of the legislature’s Labor and Housing Committee, which he chairs, in a public hearing on Tuesday.

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

By raising the salary threshold, the bill attempts to address the abuse of a “duties” exemption in existing state and federal overtime law, whereby workers with “white collar” or “professional” job titles do not qualify.

“The truth is, this provision is widely abused,” Tipping explained. “A recent study by the University of Texas and Harvard Business School found that companies widely misused this provision to deny workers their overtime. A front desk clerk becomes a ‘Director of First Impressions.’ A barber becomes a ‘Grooming Manager.’ Those are actual titles from that study.”

James Myall, a policy analyst with the Maine Center for Economic Policy, told lawmakers that the group estimates that about 26,000 additional salaried workers in the for-profit sector would be eligible for overtime under this bill when fully phased in. While not everyone who is eligible would work extra hours, Myall estimates that about 8,600 people would receive additional pay every year, amounting to about $8.4 million in additional wages.

“This bill is about ensuring that Mainers deserve to get paid fairly for the work they do, and when they go above and beyond expectations, they should be paid accordingly,” Myall said at the public hearing.

The overtime threshold at the federal and state level has sat untouched for years and previous attempts to raise it in the legislature have failed.

Since the 1970s, the beginning of an era marked by an ever widening gulf between workers’ pay and their productivity, the number of “white collar” workers who automatically qualify for overtime pay has steadily fallen, plummeting from 66% of salaried workers then to just 13% in Maine currently.

In 2019, the Department of Labor under former President Donald Trump set the threshold for overtime pay to salaries less than $35,568 a year.

It was a dramatic step backwards from the salary threshold of $47,475 proposed by former President Barack Obama in 2016. But Obama’s proposal was ruled invalid by a Texas federal district court just before it was scheduled to go into effect. Rather than defend Obama’s overtime threshold in court, Trump’s Labor Department proposed their own weaker substitute.

If passed, Maine would join five other states that already have higher requirements than the federal threshold. Previous attempts to raise the state’s overtime threshold have been opposed by Maine’s business lobbies as well as the University of Maine System.

In 2019, an overtime bill submitted by Tipping’s brother, former Rep. Ryan Tipping of Orono, would have locked in Obama’s proposed threshold at the state level. That bill died in the Democratic-controlled Labor and Housing Committee in 2020.

Another bill was introduced in 2021 by Portland Rep. Rachel Talbot Ross, who has since become the Speaker of the House. But her bill was watered down and turned into a measure to educate businesses and nonprofits on the state’s overtime laws.

The same business groups have again aligned against LD 513. The Maine State Chamber of Commerce and Hospitality Maine, which represents the restaurant industry, testified against Tipping’s bill at the public hearing on Tuesday.

Tipping said that Maine lawmakers need to act to restore overtime protections for Maine workers, as he is not optimistic that the threshold will be raised at the federal level anytime soon.

“Four years ago, [Ryan Tipping’s bill] was carried over [between legislative sessions] and eventually was not passed. I understand that there was hope at that point that the federal government would act,” he said. “Two years ago, a bill was again introduced by now Speaker of the House Rachel Talbott Ross. It was again worked, carried over, delayed and eventually amended. Again, there was a hope that the federal government would act.”

Tipping continued, “All this time, Mainers have continued to work overtime and have not been paid for it. It’s time to fix that now.”

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