Election Center

MDOL Comments on Minimum Wage Ballot Question

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On Monday, June 13, 2016, the Maine Department of Labor formally submitted public comments to Secretary of State Matt Dunlap regarding the proposed question for “An Act to Raise the Minimum Wage.”

Maine law, Title 21-A §905-A, requires that the Secretary of State provide a 30-day public comment period for the purpose of receiving comments on the content and form of proposed questions to be placed on the ballot for any pending initiatives.

The wording of the question for “An Act to Raise the Minimum Wage” as proposed for public comment is as follows: “Do you want to raise the minimum hourly wage of $7.50 to $9.00 in 2017, and in $1.00 increments up to $12 in 2020; and to raise it for service workers who receive tips from the current rate of $3.75 to $5 in 2017, in $1.00 increments up to $12 in 2024?”

The Department raised concerns about the proposed wording because it omits language reflecting that this ballot initiative would enact a permanent, annual increase to the minimum wage, and the language does not accurately reflect the “tip credit” that employers of service workers who customarily and regularly receive tips are allowed to take under Maine law.

“First, this wording neglects to ask a second, critical question given the history of the minimum wage in Maine,” wrote Commissioner Paquette. “The language of the Act specifies that the minimum wage will increase after 2020 on an ongoing and permanent basis, which is a shift from previous increases in the State minimum wage with which voters are likely familiar.

In other words, this is not a one-time increase to the minimum wage phased-in over four years in a manner similar to past increases; it is a permanent, ongoing increase to the minimum wage that has a phase-in period and then a formulaic increase using the CPI thereafter.”

The comments clarify that “The wording of the question actually implies that this is a one-time, phased-in increase by the use of the words ‘up to $12.00,’ indicating that $12 is where the increase stops. The question should reflect the ongoing and permanent increases.”

As relates to the tip credit, Commissioner Paquette stated, “The current phrasing in the proposed question, ‘to raise it for service workers’ (emphasis added) reaffirms a misunderstanding and common misapplication of the tip credit law,” where individuals interpret one-half the state minimum wage  ($3.75 being one half of $7.50) as the minimum wage for tipped employees.

The minimum wage for employees who earn tips is the state minimum wage. The tip credit as specified in statute (MRS 26 §664) authorizes what the employer can take as a maximum credit when paying wages, it does not specify the minimum that an employee must be paid as a direct wage.

In addition to the over-simplification of the tip credit elimination, the wording of the question also omits a reference to the tip credit elimination being permanent and, therefore, it does not fully reflect the change that all service employees will be paid according to the minimum wage law with permanently ongoing annually required increases in wages.

The Department offered two suggestions of language that would address the concerns raised in the commissioner’s letter.

Suggestion 1

“Do you want to raise the minimum hourly wage of $7.50 to $9.00 in 2017, and in $1.00 increments up to $12 in 2020 and to raise it annually each year thereafter according to a formula based upon the Consumer Price Index; and to change the maximum tip credit amount employers can claim for service workers who receive tips from the current rate of one-half the minimum wage to $4 in 2017, and in decreasing $1.00 increments until it is eliminated in 2025 and thereafter all workers eligible to receive tips must be paid the state minimum wage that is raised annually using a formula based upon the Consumer Price Index?”

Suggestion 2

“Do you want to raise the minimum hourly wage of $7.50 to $9.00 in 2017, and in $1.00 increments up to $12 in 2020 and to raise it annually each year thereafter according to a formula based upon the Consumer Price Index; and to raise the direct wage for service workers who receive tips from the current rate of one-half the minimum wage to $5 in 2017, in $1.00 increments up to $12 in 2024 and in 2025 and thereafter, all workers eligible to receive tips must be paid the state minimum wage that is raised annually using a formula based upon the Consumer Price Index?”

About Department of Labor

The Maine Department of Labor promotes the safety and economic well being of all individuals and businesses in Maine by promoting independence and life long learning, by fostering economic stability and by ensuring the safe and fair treatment of all people on the job.

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