Gov. LePage signs tip credit restoration bill into law
Courtesy / Portland Regional Chamber of Commerce
Gov. Paul LePage speaks to 400 people gathered for the Portland Community Chamber of Commerce's Eggs & Issues monthly business forum in Portland earlier this month. LePage has signed into law a bill allowing employers to pay tipped employees half the state's minimum wage.
Gov. Paul LePage signed into law a bill allowing employers to pay tipped employees half the state’s minimum wage.
The Portland Press Herald reported that the bill, LD 673, "An Act To Restore the Tip Credit to Maine's Minimum Wage Law," repeals the part of the state minimum wage law that would have gradually increased the minimum wage for tipped workers until they eventually were paid at the same level as other workers.
Under the new minimum wage guidelines that took effect in January, the state's regular hourly minimum wage went from $7.50 to $9, which will be followed by a $1 rise per year until it reaches $12 in 2020. After that, the minimum wage will be adjusted in relation to the consumer price index. The tipped minimum was to rise from $3.75 to $5 and would have reached the regular rate by 2024 under the repealed portion of the state minimum wage law.
The Maine State Chamber of Commerce, the Maine Restaurant Association and the industry-affiliated Restaurant Workers of Maine were among those supporting the restoration of the tip credit, while the Maine People's Alliance was among those in opposition.
Statement of Maine Restaurant Association
In a news release issued Tuesday, Steve Hewins, president and CEO of the Maine Restaurant Association, highlighted the strong bipartisan support for the bill in both the Maine House and Senate, characterizing it as "rare in our current political environment."
"This victory also shows the power of a grassroots effort of workers, combined with an association of owners, all saying the same thing," Hewins said. "We would not have accomplished this daunting task without working together."
Hewins described the tip credit as a "crucial component of the restaurant industry," noting that it allows restaurants to pay servers at one-half the prevailing minimum wage so long as they make up any shortfall if an employee's tips plus wages amount to less than the minimum wage.
The association, in its news release about the reinstatement, also stated:
- While the bill technically takes effect in 90 days, it is effectively in place now. Beginning on January 1st, 2018 the tip credit will continue to be at half the prevailing minimum wage.
- The scale continues until the minimum wage tops out at $12/hour in 2024, at which time the tip wage will be $6/hour.
- LD 673 establishes the tipped wage ‘floor’ at the present $5/hour.
Editor's note: This story was updated to include the statements from the Maine Restaurant Association, a key supporter of LD 673 as it progressed through the legislative process.
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