An Act To Help Small Employers by Making the Minimum Wage Increase More Gradual in Nonurban Areas
Maine Legislature, Session 129, LD 1098
Committee: Labor and Housing
Sponsors: KEIM, STEWART, GUERIN, MOORE, ALLEY, STANLEY
Amends: 26 MRSA §664, 26 MRSA §664-A

Legislative Document
No. 1098
S.P. 330
In Senate, March 5, 2019
An Act To Help Small Employers by Making the Minimum Wage 
Increase More Gradual in Nonurban Areas
Reference to the Committee on Labor and Housing suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator KEIM of Oxford.
Cosponsored by Representative STEWART of Presque Isle and
Senators: GUERIN of Penobscot, MOORE of Washington, Representatives: ALLEY of Beals, 
STANLEY of Medway.
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 2024 and each every 3 years on January 1st 
thereafter, the minimum hourly wage then in effect must be increased by the increase, if 
any, in the cost of living, calculated as an average of the increase for each of the 3 prior 
years. 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¢.  A 
scheduled increase in the minimum hourly wage in this section does not take effect if 
there is an extended benefit period in effect, pursuant to section 1195, as determined by 
the Department of Labor.  Subsequent to any cessation of a scheduled increase in the 
minimum hourly wage due to this subsection, the minimum hourly wage is increased to 
the next scheduled level once there is no longer an extended benefit period in effect, 
pursuant to section 1195, as of January 1st of a given year, as determined by the 
Department 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 PL 2017, c. 272, §1, 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, or, if applicable, section 664-A, except that from January 1, 
2017 to December 31, 2017, the minimum cash wage paid directly to a tipped service 
employee may not be less than $5.00 per hour.  An employer who elects to use the tip 
credit must inform the affected employee in advance, as provided for in this subsection, 
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 within the established 7-day 
workweek.  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.  The employer may not deduct any amount 
from employee tips charged to a credit card, including, but not limited to, service fees 
assessed to the employer in connection with the credit card transaction.
An employer who elects to use the tip credit must inform the affected employee in 
advance, either orally or in writing, of the following information:
A.  The amount of the direct wage to be paid by the employer to the tipped employee;
B.  The amount of tips to be credited as wages toward the minimum wage;
C.  That the amount of tips to be credited as wages may not exceed the value of the 
tips actually received by the employee;
D.  That all tips received by the affected employee must be retained by the employee, 
except for a valid tip pooling arrangement limited to employees who customarily and 
regularly receive tips in accordance with subsection 2-A;
E.  That the tip credit may not apply to any employee who has not been informed by 
the employer of the provisions for a tip credit; and
F.  If the employer uses a tip pooling arrangement, any required tip pool contribution 
amount from the employee.
Sec. 3.  26 MRSA §664-A is enacted to read:
§664-A.  Alternative minimum wage; certain nonurban areas
1.  Alternative minimum wage; scheduled increases.  Notwithstanding section 664, 
for areas listed in subsection 3 the minimum hourly wage is $11.00 per hour starting 
January 1, 2020; $11.50 per hour starting January 1, 2021; and $12.00 per hour starting 
January 1, 2022.
2.  Tolling of scheduled increases.  A scheduled increase in the minimum hourly 
wage in this section does not take effect if there is an extended benefit period in effect, 
pursuant to section 1195, as determined by the Department of Labor.  Subsequent to any 
cessation of a scheduled increase in the minimum hourly wage due to this subsection, the 
minimum hourly wage is increased to the next scheduled level once there is no longer an 
extended benefit period in effect, pursuant to section 1195, as of January 1st of a given 
year, as determined by the Department of Labor.
3.  Application.  This section applies to all areas of the State except for those 
municipalities in Cumberland County other than Baldwin, Bridgton, Harrison and Naples.
4.  Report.  The Department of Labor shall submit by January 15, 2020, and every 
January 15th thereafter, to the joint standing committee of the Legislature having 
jurisdiction over labor matters, a report analyzing job creation and job loss trends in 
urban and nonurban areas since the initiation of minimum wage increases established by 
Initiated Bill 2015, chapter 2, section 1.  This analysis must be performed by the State 
Economist and the chief economist at the Department of Labor and must include the use 
of data from the United States Department of Commerce, United States Census Bureau 
and employment and wage information contained in confidential unemployment tax 
reports.  Any confidential information must be reported in aggregate form in order to 
preserve confidentiality.
SUMMARY
This bill creates an alternative minimum hourly wage that applies to certain 
designated nonurban areas starting on January 1, 2020.  Under this bill the minimum 
hourly wage rate for those areas is $11 per hour and increases by 50¢ each January 1st 
until it reaches $12 per hour on January 1, 2022.  The minimum hourly wage stays the 
same as in current law for Cumberland County, except for the towns of Baldwin, 
Bridgton, Harrison and Naples.
The bill also freezes any scheduled increase in the current minimum wage or the new 
alternative minimum wage if there is in effect an extended benefit period for 
unemployment compensation benefits, as determined by the Commissioner of Labor.  
The scheduled increase or increases will resume once there is no longer an extended 
benefit period in effect as of January 1st of a given year.  It also delays the cost-of-living 
adjustment for the current minimum wage to January 1, 2024, changes the calculation to 
be the average cost-of-living increase over the prior 3 years and changes the timing of the 
cost-of-living adjustment to be every 3 years instead of every year.
It also requires the Department of Labor to submit an annual report analyzing job 
creation and job loss trends in urban and nonurban areas since the initiation of minimum 
wage increases established by Initiated Bill 2015, chapter 2, section 1.