AUGUSTA — The Maine Department of Labor is reminding business owners that effective January 1 the state minimum wage increases from $12 to $12.15 per hour.

This increase is pursuant to Maine law (Maine statute 26 MRS 664), which requires annual adjustments to the minimum wage by the cost of living index (CPI-W) beginning in 2021.

This follows $1 annual increases to the minimum wage each of the past three years.

In addition to the minimum wage itself, the Department has calculated the new tip wage, or service employee minimum wage, in 2021 to be $6.08 per hour.

This means that service employees must receive at least a direct cash wage of $6.08 per hour from the employer.

The employer must be able to show that the employee receives at least the minimum wage of $12.15 per hour when the direct wage and tips are combined at the end of the week.

Maine’s laws state that tips are the property of the employee and tip pooling arrangements can only include service employees. More information on the service employee minimum wage can be found here: Minimum Wage and Overtime.

The minimum salary threshold for exempting a worker from overtime pay is also based on the minimum wage.

Starting January 1 the new minimum salary threshold is $700.97 per week, or $36,450 per year.

This is only one of the factors used in determining whether a worker is exempt from overtime pay under federal or state law. The duties of each worker must be considered as part of this analysis. The law can be found here. More information can be found here.