A bill that would dramatically increase the income threshold at which workers in Maine become exempt from overtime rules is making waves among some business groups in the state.
The Manufacturer’s Association of Maine is warning against the passage of LD402, pointing to opposition from numerous small business representatives during a public hearing.
Executive Director Lisa Martin was actively against the bill, which would annually raise the minimum salary an executive or salaried employee must receive in order to be exempt from overtime pay laws.
“We were in opposition to this bill to make sure that the companies could fulfill their contractual obligations and work with their companies and their employees to make that happen,” Martin told The Center Square. “We had a number of companies sign a letter to the committee opposing that, and it obviously didn’t get a lot of traction due to opposition here in the state.”
The federal overtime threshold currently sits at $23,660 – employees who make more than that amount, depending on job description and duties, can be classified as "exempt," meaning that the employer doesn't have to pay an overtime rate if those workers go over 40 hours in a week.
LD402 would increase that threshold in Maine annually, starting at $33,000 on Oct. 1, 2019, and increasing each year until it hits $55,224 on Jan. 1, 2022. Currently exempt employees who fall below the new threshold would suddenly become eligible for overtime unless employers raise their salaries to match it.
Starting in 2023, the bill provides for annual future increases in the threshold based on U.S. Department of Labor statistics for worker salaries.
Martin said the bill would unfairly put strains on the state's manufacturing industry.
“We … feel that the businesses [in the manufacturing sector] were doing the absolute best they were doing in terms of working with employees who could provide that time and overtime, and having a law that says they can’t do that would be very detrimental, particularly in the worker shortage era,” Martin said. “People [are] already strained with making sure that they’re able to fill their contractual agreements, and with the worker shortage, it’s a major issue.”
Martin predicted that the bill was unlikely to become law.
“It depends on a number of factors,” Martin said. “We are certainly going to be watching this, but we don’t expect it to be too impactful, hopefully, in the next session.”