Preparing for 2025: Maine Minimum Wage, Tipped Wage, and Salary Threshold Updates
As we look ahead to 2025, it’s important for Maine employers to understand the upcoming changes to minimum wage, tipped wage, and salary thresholds. These updates are essential for staying compliant and ensuring employees are compensated fairly. Let’s dive into what you need to know for January 1, 2025, followed by a recap of the 2024 limits.
Minimum Wage Increase for 2025
Starting January 1, 2025, Maine’s minimum wage will rise from $14.15 to $14.65 per hour, based on a 3.6% increase in the cost of living. This adjustment ensures that the minimum wage keeps pace with inflation. The cities of Portland and Rockland, Maine have a higher minimum wage which is set at $15.50 per hour in 2025. Be sure to update your payroll to reflect this change in the first pay period of 2025.
Tipped Minimum Wage for 2025
In addition to the standard minimum wage, there is also a separate minimum wage for tipped employees. As of January 1, 2025, the minimum wage for tipped employees in Maine will be $7.33 per hour. For service workers in Portland and Rockland, the tipped minimum wage will be $7.75 per hour.
Employers are required to pay tipped employees the full minimum wage of $14.65 per hour ($15.50 in Portland and Rockland), but they can take the FICA tip credit of up to $7.32 ($7.75 for Portland and Rockland), which is the difference between the standard minimum wage and the tipped minimum wage. However, if an employee’s tips combined with the employer’s direct wages do not equal the standard minimum wage, the employer must make up the difference.
Additionally, the monthly tip threshold to qualify as a tipped employee will rise from $179 to $185 per month.
Salary Threshold for Overtime Exemption in 2025
The salary threshold for exempt employees will also see an increase in 2025. The new federal minimum salary threshold was set to be $1,128 per week or $58,656 annually before being stuck gown by a Texas judge. For 2025, Maine exempt employees must earn at least $845.21 per week or $43,951 per year. However, remember that an employee must still meet certain EAP job duties to qualify for overtime exemption, even if they earn above this salary level.
Recap: What Were the Limits for 2024?
In 2024, Maine’s minimum wage was $14.15 per hour, a 2.5% increase over the 2023 rate. For tipped employees, the minimum wage was $7.08 per hour, with employers needing to ensure that the combination of wages and tips met the standard minimum wage of $14.15.
The salary threshold for exempt employees in 2024 was set at $816.35 per week or $42,450.20 annually.
As of January 1st, 2025 these 2024 rates will no longer be applicable.
| 2025 Threshold | 2024 Threshold | |
|---|---|---|
| Maine Minimum Wage | $14.65/hour | $14.15/hour |
| Portland/Rockland Minimum Wage | $15.50/hour | $15.00/hour |
| Maine Tipped Wage | $7.33/hour | $7.08/hour |
| Portland/Rockland Tipped Wage | $7.75/hour | $7.50/hour |
| Maine Exempt Salary | $845.21/week | $816.35/week |
When will Maine’s minimum wage increase?
Due to legislation passed in 2016, Maine’s minimum wage must increase to keep up with the cost of living. Each year, the new minimum wage will take effect on January 1st. All employees must be paid at least the new minimum wage on the first pay date in January, regardless of what pay period you are paying out, for your business to maintain compliance.
Preparing for the Changes
As Maine’s minimum wage continues to rise, it’s crucial for both employers and employees to understand these changes and take the necessary steps to ensure compliance. Employers should review their payroll systems and salary structures, especially for exempt employees, and make any adjustments needed to comply with the new wage and salary requirements.
Make sure to download updated labor law posters once they become available.
Need help navigating these wage changes or updating your payroll? Our team is here to assist you with all your payroll and employee management needs.
Conclusion
The increase in Maine’s minimum wage, tipped wage and salary threshold will take effect on January 1, 2025. It is crucial for both employers and employees to understand the differences between exempt and non-exempt employees and how these classifications affect the payment of minimum hourly wages and salaries.
Employers should review their payroll and make any necessary adjustments to comply with the new wage requirements. Employees should also be aware of their rights and ensure they are receiving the correct wages. Contact our team here for help with your payroll or employee needs!