|Recent changes to federal and state wage and hour laws continue to present tangled compliance issues for employers as the New Year approaches.At the state level, Referendum Question 4, approved by Maine voters in November, raised the Maine minimum wage to $9.00 per hour, effective on January 7, 2017. A little-noticed consequence of this change is that the minimum salary in Maine for salaried employees exempt from overtime under the “white collar” exemptions (executive, administrative and professional employees) also will go up on January 7, 2017, from the current $455 per week, or $23,660 per year, to at least $519.25 per week, or $27,000 per year.
The Maine statute that establishes the exemption from overtime under state law, 26 M.R.S. §663(3)(K), grants the exemption to:
A salaried employee who works in a bona fide executive, administrative or professional capacity and whose regular compensation, when converted to an annual rate, exceeds 3000 times the State’s minimum hourly wage or the annualized rate established by the United States Department of Labor under the federal Fair Labor Standards Act, whichever is higher.
Until now the federal minimum salary level of $455 per week, or $23,660 per year, has been higher than 3,000 times the Maine minimum wage of $7.50. However, as of January 7, 2017, 3000 times the new Maine minimum wage of $9.00 will be $27,000 per year, higher than the current federal level. The salary threshold under Maine law will continue to increase along with the minimum wage through 2020, consistent with the changes enacted by Referendum Question 4.
As we have reported, the U.S. Department of Labor attempted to increase the minimum salary level for exempt white-collar workers to the higher level of $47,476, but that increase was put on hold by a federal court in Texas on November 23, 2016, which enjoined the regulation before it could go into effect on December 1.
Even though the federal increase is on hold, the Maine increase will still go forward on January 7, a fact not widely publicized. While much attention has been placed on the status of the federal regulations, employers should carefully review whether their wage and hour practices are consistent with state law as well.
For questions concerning these requirements, please contact one of Rudman Winchell’s experienced labor and employment law attorneys.