An Act To Base the Minimum Wage on a New England State Average and To Restore the Tip Credit
Maine Legislature, Session 128, LD 0831
Committee: Labor, Commerce, Research and Economic Development
Sponsors: DOW, SIROCKI, CYRWAY, DAVIS, SAVIELLO, WOODSOME, BICKFORD, HILLIARD, WARD
Amends: 26 MRSA §664

Legislative Document
No. 831
S.P. 277
In Senate, March 7, 2017
An Act To Base the Minimum Wage on a New England State 
Average and To Restore the Tip Credit
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator DOW of Lincoln.
Cosponsored by Representative SIROCKI of Scarborough and
Senators: CYRWAY of Kennebec, DAVIS of Piscataquis, SAVIELLO of Franklin, 
WOODSOME of York, Representatives: BICKFORD of Auburn, HILLIARD of Belgrade, 
WARD of Dedham.
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¢ the average 
minimum hourly wage in the New England states of New Hampshire, Vermont, 
Massachusetts, Connecticut and Rhode Island on July 1st of the previous year, as 
determined annually by the Commissioner of Labor.  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 the minimum cash wage paid 
directly to a tipped service employee may not be less than 50% of the minimum hourly 
wage established under subsection 1.  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 provides that starting January 1, 2018 the minimum hourly wage is the 
average minimum hourly wage in the New England states of New Hampshire, Vermont, 
Massachusetts, Connecticut and Rhode Island on July 1st of the previous year, as 
determined annually by the Commissioner of Labor.  It also restores the tip credit.