Minimum Wage

Inflation drives Maine’s minimum wage to $12.75 in 2022

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The Maine Department of Labor (DOL) recently announced the state’s minimum wage will increase by 60 cents on January 1, 2022. The minimum hourly wage is currently $12.15 but will increase to $12.75 next year as the result of a law initiated by ballot initiative in 2016.

The law indexes the state minimum wage to the Consumer Price Index for Urban Wage Earners and Clerical Workers for the Northeast Region, which is published by the federal Bureau of Labor Statistics. The law went into effect for the first time on January 1, 2020, and on that same date in 2021, the minimum wage grew from $12.00 per hour to $12.15 per hour, a 1.25% increase. 

The increase is determined annually by measuring the percent increase in the cost of living from August of the previous year over the level in August in the year preceding that year. 

The 60 cent increase in the minimum wage that will go into effect in 2022 is a 4.9% increase from the current minimum wage. The most recent increase under the law is approximately four times larger than the increase that went into effect in January 2021.

As a result of the cost of living increase, the minimum wage for tipped workers will also increase. Under the law, employers who pay service workers the tipped wage must be able to demonstrate employees made at least the hourly minimum wage when wages and tips are combined at the end of the week. To meet the new $12.75 minimum wage that will go into effect next January, the new minimum tipped wage will be $6.38 per hour. 

The state’s minimum salary threshold, which exempts workers from requirements they receive overtime pay if they work more than 40 hours per week, is also based on the minimum wage and will increase as a result of the recently announced hourly minimum wage increase. When the $12.75 hourly minimum wage goes into effect next January, the new minimum salary threshold for workers exempt from overtime pay will be $735.59 per week, or $38,251 per year. 

The DOL notes the minimum salary threshold is only one factor used in determining whether a worker is exempt from overtime pay. Workers can make over this amount and still be eligible to receive overtime. Another factor important in determining worker eligibility for overtime is duties on the job.

The DOL’s Bureau of Labor Statistics is responsible for enforcing the state laws that apply to minimum wage and overtime rules.

About Katherine Revello

Katherine Revello is a reporter for The Maine Wire. She has degrees in journalism and political science from the University of Maine. Her writing has appeared in Reason, The Washington Examiner, and various other publications. Got news tips? Contact Katherine at krevello@mainepolicy.org.

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