What You Need to Know About Maine’s Minimum Wage

Nothing in this article constitutes legal advice. Please consult a tax attorney or tax professional if you have questions about minimum wage compliance.

As a small business owner in the Pine Tree State, we know you want to stay on top of recent increases to Maine’s minimum wage, and that’s why we put together this quick guide as a starting point.

What is the minimum wage in Maine?

The minimum wage in Maine is $12 per hour, which is $4.75 more than the federal minimum wage of $7.25.

Get Started with Square Payroll

Payroll processing trusted by thousands.

Will the minimum wage change?

The minimum wage in Maine has been steadily increasing by a dollar each year since 2017. As of January 1, 2020, the Maine minimum wage increase is at $12 per hour, up from $11 per hour in 2019, $10 in 2018, and $9 per hour in 2017. The minimum wage for tipped employees is now $6, up from $5.50.

Some additional Maine state minimum wage regulations apply for specific categories of employee in Maine, including:

  • For tipped employees, employer can take a tip credit of up to $5.50 and must pay tipped employees a cash wage of $5.50 per hour. Note that an employee’s tips plus cash wage should equal at least $11.

  • Full-time students can be paid $9.35 an hour for up to 20 hours of work per week at certain employers, like work-study programs at universities.

  • Employees under 20 years of age can be paid a training wage of $4.25 per hour for the first 90 days of employment.

  • Employees considered exempt under the Fair Labor Standards Act (FLSA)

  • Overtime pay in Maine is $18 per hour for anything over 40 hours in a week, or 1.5 times the Maine minimum wage.

  • Workers in Portland and Bangor experience different pay levels. Though the Maine state minimum wage is $12, Bangor and Portland, Maine minimum wage is still $9.75 and $10.90, respectively. However, business owners must comply with the minimum wage that is the most generous to the employee. So, in regards to Bangor and Portland minimum wage, the state minimum wage would supersede.

How should small business owners prepare for minimum wage increases?

In 2016, Maine voters approved a measure to gradually increase the minimum wage in relation to the cost of living. On January 1, 2020, the minimum wage will increase to $12 per hour.

According to the legislation, on January 1, 2021, and each January 1 thereafter, the minimum hourly wage must be increased according to the increase in the cost of living.

Here are some other steps you can take to make sure your business is ready for the Maine minimum wage increase and more:

  • Reevaluate your staffing: Take a look at your hourly, weekly, and monthly sales to determine if your current staffing levels are appropriate. For example, perhaps you only need to hire temporary employees during your busy seasons instead of taking on more full-time regular staff.

  • Hire the best: Hiring the right peopleis always important, but doubly so when you operate a small business. So take your time and cast a wide net when recruiting new employees. Once you have your team in place, make employee retention a priority by offering employee benefits and a path to growth and development in order to make your business a more attractive place to work.

  • Upgrade your technology: When you avoid complicated, time-consuming aspects of management with tools like automatic payroll, you can spend more time focusing on issues like staffing and growing your business. Square Payroll software includes custom payroll features, which make running your unique business needs a breeze, and offers small business pricing, which helps you remain under budget.

    • Set yourself up for success: : One of the first steps when starting your own business and hiring employees is to get a free EIN (or Employer Identification Number), which you need for tax purposes to pay your employees. Square can help you get your EIN, as well as help navigate other business challenges with COVID-19 small business resources and more.

While these are helpful guidelines to follow, make sure your business is prepared and stays in compliance by discussing Maine minimum wage laws with your accountant and lawyer.