Changes to the Maine minimum wage law taking effect January 1 mean that the minimum wage for tipped workers will continue to be $5 an hour instead of rising $1 an hour like the minimum wage for workers who don’t receive tips.
Maine voters approved Question 4 on the 2016 ballot. The initiative set in motion annual minimum wage increases that will take the minimum wage from $7.50 an hour in 2016 to $12 an hour by 2020. The rate going into effect on January 1, 2018, puts the nontipped minimum wage at $10 an hour, up from the 2017 rate of $9 an hour.
The 2016 ballot initiative also called for an increase in the minimum wage for tipped workers from 50 percent of the nontipped minimum wage ($3.75 in 2016) to $5 an hour as of January 1, 2017. Under the ballot initiative, the tipped minimum wage would increase $1 a year until 2024, when it would also reach $12 per hour.
However, those changes in the tipped minimum wage won’t take place. Last summer, the state legislature passed a law reinstating the tipped minimum wage as 50 percent of the nontipped minimum, meaning the tipped minimum wage will remain at $5 an hour instead of rising by $1 to $6 an hour.
The legislation was in response to a campaign by a number of restaurant workers. After the 2016 referendum passed, many servers began to see customers tipping less based on their belief that they didn’t have to tip because servers were being paid higher wages. Although the ballot initiative was intended to increase servers’ earnings, some reported a reduction in their take-home pay.
Employers still must make up the difference if servers don’t make at least as much as the nontipped minimum wage with tips.
For more information on Maine’s minimum wage, see the August issue of Maine Employment Law Letter.