Peter McGuire
Portland Press Herald, Maine
PORTLAND, Maine — A broad coalition of business groups are lining up in staunch opposition to a bill that would extend overtime eligibility to thousands of additional salaried workers in Maine.
About 40 trade groups and industry associations released a statement Wednesday saying the bill would have dire consequences for the Maine economy and could force some employers to leave the state. Proponents of the bill say those negative prognostications are overblown.
Currently, salaried employees who earn less than $36,000 a year must receive overtime pay, equal to 1.5 times the normal pay rate, for hours they work beyond 40 hours a week. Salaried employees who are paid more than that can earn overtime pay, but they need to meet specific requirements such as being in a position that does not involve managing or supervising others.
The proposed bill, LD 402, would progressively increase that threshold over the next three years to more than $57,000 by 2023, with regular bumps every year afterward based on the average annual rate of increase of weekly earnings for full-time wage and salary workers.
Supporters of the bill say it would level the playing field for salaried workers after decades of declining numbers of salaried workers eligible for overtime and rising corporate profits.
But opponents, including some of the state’s biggest trade associations, say passage of the law would hinder new job creation and sabotage economic gains Maine has made in recent years.
“LD 402 would create new barriers and seriously undermine economic growth and new opportunities in Maine in many ways, including incentivizing existing and prospective employers to look elsewhere to grow and locate their businesses and jobs,” said Maine State Chamber of Commerce Executive Vice President Peter Gore in a statement.
Groups opposing the bill include professional associations representing ambulance providers, hospitals, farmers, campground owners, beer and wine distributors, school boards and companies in the tourism, hospitality, insurance, auto sales and construction industries, among others.
Maine state law ties salaried workers’ overtime eligibility to 3,000 times the minimum wage, or $12, putting the annual threshold at $36,000. Any law that increases that threshold is a nonstarter for the business community, said David Clough, state director of the National Federation of Independent Businesses.
“We don’t see that there is any need for an increase other than that which is built into the law,” Clough said.
The new thresholds proposed by the law mirror the levels proposed by the Obama administration in 2014 that would have roughly doubled the then-existing federal threshold of $23,000 a year. Those rules were set back by court battles and never went into effect. Last year, the Trump administration increased the threshold by a lesser amount to $35,568.
Only two other northeastern states, New York and Pennsylvania, have salary thresholds for overtime pay above the federal standard, Clough said. Some Maine employers are concerned they will be disadvantaged by competition from states without the additional requirement.
“Concerns (are) about this being a way that Maine stands out when it comes to extra costs imposed on jobs that are different from other states,” he said.
Businesses are also concerned the increase is coming at the same time they are dealing with a minimum wage that went up to $12 an hour this year and a new paid time off requirement for many businesses that goes into effect next year, Clough said.
“This is almost like a Coney Island hot dog eating contest -- how many labor costs can you eat?” he said. “We don’t want to find out.”
There will be staunch opposition to the bill even though the state’s labor market is red hot and many workers are already paid well above the minimum wage. Maine’s unemployment rate has been below 4 percent for two years and businesses’ biggest complaint in recent years has been how hard it is to find workers, not how much they need to be paid.
While that “30,000-foot view” may hold true in parts of southern Maine, in less affluent parts of rural Maine businesses are still struggling, Clough said.
Supporters of increased overtime protections say arguments that the measure will sink Maine’s economy and force businesses out are reminiscent of the talking points issued during the battle to increase the state’s minimum wage four years ago.
“Those doomsday predictions didn’t come true with the minimum wage,” said James Mayall, a policy analyst at the progressive Maine Center for Economic Policy. An analysis by the center indicated the proposed change in the law would cover about 28,000 salaried workers in Maine. Only about 9,000 workers would likely be eligible to for overtime pay under its provisions, Mayall said. The minimum wage law, in comparison, covered more than 100,000 wage earners.
“In a lot of ways, this is more modest in that it impacts fewer employers,” he said.
The Legislature’s Committee on Labor and Housing held a public hearing on the bill last year, but it was held over for a vote until this session. Lawmakers are expected to hold a work session on the bill Thursday afternoon.
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©2020 the Portland Press Herald (Portland, Maine)