Thousands Of Workers Could See Pay Increase Under New Maine Law

If you have been a part of the workforce for very long, there is a good chance you have heard the term "exempt employee".  Basically, that means that a salaried employee who makes a certain amount of money annually is exempt from getting overtime.

So, if a particular project takes 55 hours in a week to complete (way over 40 hours), that employee is not entitled to any extra compensation.  That being said, most employers will give their hard working employees some kind of extra comp time.

Anyone below that threshold, which currently sits at about $38,000 per year, will be entitled to get overtime if they go over 40 hours per week.

According to the KJ, a new bill in the Maine legislature would gradually, over the course of three years, bump that threshold up to $57,000 per year.

It is not the first time in recent history that this has been discussed.  In 2016, under the Obama administration, there was a federal bill that would have increased the exempt level to $48,000.  In that case, Texas pushed back and the increase was stalled.  Eventually, during the Trump administration, the amount was increased, but by a much smaller amount.  The exempt amount went from about $27,000 to about $38,000.

By some estimates, this would make an additional 30,000 Maine workers eligible for overtime.

While some people that the current exempt salary compared to the current cost of living is leading to the exploitation of some Maine workers, some pro-business people are concerned that this could lead to the closure of dozens (if not hundreds) of small businesses.  The businesses that would be most affected are those that are operating with limited staffs and narrow margins.

Maine would not be the only state to have its salary threshold.  For example, in Pennsylvania, the current threshold is about $40,000.  In California, it is just over $62,000.

What is your opinion?  Is it a good idea or do you think it will be a threat to small businesses?