As we head towards the end of 2023, it is time to begin preparing our businesses (and ourselves) for what is to come in 2024. Employers must know any new local legislative compliance challenges that are ahead. One of the changes that Maine businesses need to be aware of is the new state and local minimum wages. Let’s take a look at Maine’s minimum wage increase for 2024.
When will Maine’s minimum wage increase?
Due to legislation passed in 2016, Maine’s minimum wage must increase to keep up with the cost of living. Each year, the new minimum wage will take effect on January 1st. All employees must be paid at least the new minimum wage on the first pay date in January, regardless of what pay period you are paying out, for your business to maintain compliance.
How much will Maine’s minimum wage increase in 2024?
The consumer price index adjust calls for an increase in minimum wage of 2.5% over the current rate of $13.80 per hour. This means that the new minimum wage in Maine starting on January 1st, 2024 will be $14.15 per hour. Again, employees must be paid at least this amount on the first pay date in January, regardless of what pay period you are paying out.
Additionally, the minimum salary level in Maine will increase. The new salary threshold will be $816.35 a week, or $42,450.20 a year. Any employees that you have marked as exempt from overtime and pay a salary too, must earn at least this amount per week. Remember, your exempt employees must meet certain duties test and job roles in order to be classified this way. You can read more about exempt vs non-exempt employees here.
What is Portland and Rockland’s minimum wage?
The cities of Portland and Rockland have local ordinances in effect that allow them to have different minimum wage than the rest of the state. For 2024, the minimum wage for employees in these cities is $15.00 per hour.
Maine’s tipped minimum wage for 2024
In addition to the standard minimum wage, there is also a separate minimum wage for tipped employees. Tipped employees are workers who customarily and regularly receive more than $30 a month in tips. As of January 1, 2024, the minimum wage for tipped employees in Maine will be $7.08 per hour. This is increased from $6.90 per hour in 2023.
Employers are required to pay tipped employees the full minimum wage of $14.15 per hour, but they can take a tip credit of up to $7.08, which is the difference between the standard minimum wage and the tipped minimum wage. However, if an employee’s tips combined with the employer’s direct wages do not equal the standard minimum wage, the employer must make up the difference.
What was Maine’s minimum wage in 2023?
In 2023, the minimum wage in Maine rose 8.2%! Non-exempt employees must have been paid at least $13.80 per hour, while tipped employees needed to make at least $6.90 per hour. Exempt employees where required to earn at least $796.17 per week, or $41,400.84 per year. Employees in Portland or Rockland must have earned $14.00 per hour in 2023.
Conclusion
The increase in Maine’s minimum wage to $14.15 per hour and the tipped minimum wage to $7.08 per hour will take effect on January 1, 2024. It is crucial for both employers and employees to understand the differences between exempt and non-exempt employees and how these classifications affect the payment of minimum hourly wages and salaries.
Employers should review their payroll and make any necessary adjustments to comply with the new wage requirements. Employees should also be aware of their rights and ensure they are receiving the correct wages. Contact our team here for help with your payroll or employee needs!