An Act To Eliminate the Indexing of the Minimum Wage to Inflation
Maine Legislature, Session 128, LD 0778
Committee: Labor, Commerce, Research and Economic Development
Sponsors: HARVELL, DOW, BRADSTREET, GINZLER, HARRINGTON, HILLIARD, O'CONNOR, PARRY, PIERCE, SANDERSON
Amends: 26 MRSA §664

Legislative Document
No. 778
H.P. 558
House of Representatives, March 2, 2017
An Act To Eliminate the Indexing of the Minimum Wage to 
Inflation
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative HARVELL of Farmington.
Cosponsored by Senator DOW of Lincoln and
Representatives: BRADSTREET of Vassalboro, GINZLER of Bridgton, HARRINGTON of 
Sanford, HILLIARD of Belgrade, O'CONNOR of Berwick, PARRY of Arundel, PIERCE of 
Dresden, SANDERSON of Chelsea.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  26 MRSA §664, sub-§1, as amended by IB 2015, c. 2, §1, is further 
amended to read: 
1.  Minimum wage.  The minimum hourly wage is $7.50 per hour.  Starting January 
1, 2017, the minimum hourly wage is $9.00 per hour; starting January 1, 2018, the 
minimum hourly wage is $10.00 per hour; starting January 1, 2019, the minimum hourly 
wage is $11.00 per hour; and starting January 1, 2020, the minimum hourly wage is 
$12.00 per hour.  On January 1, 2021 and each January 1st thereafter, the minimum 
hourly wage then in effect must be increased by the increase, if any, in the cost of living. 
The increase in the cost of living must be measured by the percentage increase, if any, as 
of August of the previous year over the level as of August of the year preceding that year 
in the Consumer Price Index for Urban Wage Earners and Clerical Workers, CPI-W, for 
the Northeast Region, or its successor index, as published by the United States 
Department of Labor, Bureau of Labor Statistics or its successor agency, with the amount 
of the minimum wage increase rounded to the nearest multiple of 5¢.  If the highest 
federal minimum wage is increased in excess of the minimum wage in effect under this 
section, the minimum wage under this section is increased to the same amount, effective 
on the same date as the increase in the federal minimum wage, and must be increased in 
accordance with this section thereafter. 
Sec. 2.  26 MRSA §664, sub-§2, as amended by IB 2015, c. 2, §2, is further 
amended to read: 
2.  Tip credit.  An employer may consider tips as part of the wages of a service 
employee, but such a tip credit may not exceed 50% of the minimum hourly wage 
established in this section.  Starting January 1, 2017, the minimum cash wage paid 
directly to a tipped service employee may not be less than $5.00 per hour, and the tip 
credit may not exceed the difference between the minimum cash wage paid directly to a 
tipped service employee and the minimum hourly wage established under subsection 1.  
Starting January 1, 2018, and on each January 1st thereafter, the minimum cash wage 
paid directly to a tipped service employee must be increased by an additional $1.00 per 
hour until it reaches the same amount as the annually adjusted minimum hourly wage 
established under subsection 1, except that if the minimum cash wage paid directly to a 
tipped service employee is less than $1.00 less than the annually adjusted minimum 
hourly wage, it must be increased by that lesser amount.  An employer who elects to use 
the tip credit, until it is eliminated under this subsection, must inform the affected 
employee in advance and must be able to show that the employee receives at least the 
minimum hourly wage when direct wages and the tip credit are combined.  Upon a 
satisfactory showing by the employee or the employee's representative that the actual tips 
received were less than the tip credit, the employer shall increase the direct wages by the 
difference. 
The tips received by a service employee become the property of the employee and may 
not be shared with the employer.   Tips that are automatically included in the customer's 
bill or that are charged to a credit card must be treated like tips given to the service 
employee.  A tip that is charged to a credit card must be paid by the employer to the 
employee by the next regular payday and may not be held while the employer is awaiting 
reimbursement from a credit card company. 
SUMMARY 
This bill eliminates the indexing of the minimum wage to inflation, which under 
current law is scheduled to begin on January 1, 2021.