Readers respond to a Feb. 12 Mainebiz Daily Report story on a bill, now in the Legislature, which would increase the earnings cap that determines whether salaried workers are eligible for overtime pay.
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Hospitality is Maine’s largest private sector employer. One in every 10 Maine residents works in our industry and we contribute roughly $400 million dollars to the state’s General Fund annually. We take our role in Maine’s economy very seriously and care deeply for our employees, who are our lifeblood. Many Maine residents have their first job in our industry, or train and become a manager, and many more make hospitality their career of choice.
In its article, Mainebiz included information provided by the Maine Center for Economic Policy (MECEP) that stated of the current minimum threshold for salary of $36,000 as being at a level, “that hasn’t been adjusted in recent years to keep up with inflation, according to MECEP.” That is simply untrue. The current $36,000 threshold was increased to that level on Jan. 1 of this year. In fact, there have been four increases over the last four years, to go from $23,660, which we all believe was too low, to $36,000 in stages. This constituted a 52% increase over four years, which we believe more than covers inflation.
LD402 raises the threshold to just over $57,000, a 58% increase over where it is today and a whopping 140% over the salary threshold when the increases began. After that there will be increases annually based on the Consumer Price Index tied to Maine’s minimum wage law. This far exceeds President Barack Obama’s proposed increases, which were rejected as being too great. And his administration was looking at major urban areas like New York City and Los Angeles when formulating the final salary numbers, not rural or northern Maine, where this will be devastating.
Maine’s hospitality industry is overwhelmingly made up of small businesses that cannot afford these types of increases. For anyone to believe that Maine’s diverse business and geographic sectors could withstand this one-size-fits-all approach to employee compensation is seriously mistaken. We are already seeing pressure from the cost of labor and our fear is that it has just begun. Maine’s small hospitality businesses implore the Legislature and Gov. Janet Mills to be reasonable in their deliberation of these increases. LD 402, amended or otherwise, is not the answer.
— Greg Dugal, director of government affairs, HospitalityMaine
Gov. Janet Mill’s recently released 10-year economic development plan calls for growing our workforce, increasing productivity and encouraging innovation, all to provide our state with a robust economic future.
For that to happen, we need jobs. And in order to have jobs, we need businesses — large and small.
But the recent increases in the cost of doing business for Maine’s small businesses, particularly our small rural businesses, has put pressure on them like never before — three years of minimum wage and automatic overtime increases, and paid time off in 2021.
LD 402 proposes to increase the overtime threshold by 53% over a four-year period, from $36,000 to finally landing on $55,224 — then indexing the threshold each year thereafter. The Mainebiz article was full of unsubstantiated and inaccurate data posing as facts. Let’s discuss a few.
First, Maine’s overtime standards have differed from the federal standard since 1999, when we tied the overtime threshold to increases in our minimum wage. Furthermore, Maine’s minimum wage has been above the federal level for many years and is significantly so now. At this moment, Maine’s threshold is still above the federal level, and will remain so, as the minimum wage will be indexed each year. Any idea that Maine’s overtime has lagged behind is questionable.
At more than $55,000, Maine will have one of the highest thresholds in the country, adding to our anti-business reputation. The impact will be catastrophic. For businesses, it means a huge increase in the cost of doing business, on top of other costs small businesses are already struggling with. And it will hurt workers too. Workers currently considered salaried or management employees would likely see their position converted to hourly. Employers will be unable to keep pace with the salary adjustments necessary to maintain salaried status.
That creates morale issues. Salaried workers may feel demoted, their career trajectory hurt. Employers may need to retool their workforce, while trying to maintain productivity. Employees may need to turn in cell phones, laptops, tablets, etc., and instructed to conduct no work after hours — even if their work ethic motivated them to continue to do so, and thereby negatively impacting productivity.
LD 402 flies in the face of the goals of the 10-year economic growth plan. If passed, its higher cost will cripple many Maine businesses, hurting job growth, and sending the message that Maine is out of touch with the rest of the country.
— Peter M. Gore, executive vice president, Maine State Chamber of Commerce
