By Ramona du Houx
The Maine Small Business Coalition, representing thousands of progressive small business owners across the state, is endorsing legislation to guarantee overtime pay for more Maine workers. LD 402 would gradually raise the salary threshold for eligibility for overtime pay, benefiting 28,000 salaried Maine workers. The bill will have a work session in the Labor and Housing Committee Wednesday morning.
“As a baker, I can tell you the recipe for a successful small business: value your employees. That includes valuing their time and allowing them to have a life outside of work. It means allowing them to spend time with their friends, family, and community so that they can come back to work renewed and ready to give their all,” said Jim Amaral, founder and owner of Borealis Breads in Waldoboro and Wells.
Maine small businesses, who overwhelmingly pay their workers fully for their time, often find themselves competing with large, out-of-state corporations that take advantage of outdated wage and hour laws to compensate their workers for less than the full time they work.
“We have long fought for a living wage because we don’t believe that our business can be successful when our employees are struggling. That’s why it’s so frustrating to see big corporations skirting minimum wage laws by refusing to pay low wage salaried employees overtime. If we believe in a living wage, we need to close the loopholes that undermine it,” said Briana and Andrew Volk, owners of the Portland Hunt and Alpine Club.
The bill — LD 402, “An Act to Restore Overtime Protections for Maine Workers” — would boost middle-class wages by $8.8 million, according to a new report published by the Maine Center for Economic Policy.
“No worker in Maine should be made to work 60 or 70 hours per week without earning a living wage,” said James Myall, a policy analyst at MECEP and the report’s author. “Maine’s middle class is struggling even as corporations reap larger profits and pay lower taxes. LD 402 would guarantee overtime pay for all workers who earn less than $55,000. It would give Maine’s middle class a much-needed raise and boost our economy.”
Nearly all hourly workers are already guaranteed overtime when they work more than 40 hours. But contrary to common understanding, overtime protections apply to salaried workers too. All workers who earns less than a “salary threshold” set by federal and state overtime regulations must receive time-and-a-half pay for overtime. But the salary threshold has failed to keep up with inflation as business interests have fought off proposed adjustments in an effort to keep wages low. As a result, salaried workers have lost overtime protection over time — including those with relatively low salaries.
“My parents founded Halcyon Yarn in 1971. They believed that the fabric of our business was only as strong as each individual thread. Together with our loyal employees, we have been able to create a beautiful tapestry over the last forty years,” notes Gretchen Jaeger, the owner of Halcyon Yarn in Bath. “We support paying salaried employees overtime because our business and our community fall apart when any one of us is holding on by a strand."
While 65 percent of salaried Mainers earned less than the salary threshold in the ‘70s, only 20 percent do today. Under current Maine law, workers with salaries as low as $36,000 annually can be made to work overtime without earning a single additional dime. For those workers, accepting a salaried position can become a trap of long hours with low pay. LD 402 would increase the salary threshold to guarantee overtime for all workers who earn less than $55,000 annually.
Phil Coupe, co-founder of ReVision Energy in South Portland, argues that allowing salaried employees to earn overtime was one of the ways that ReVision had expanded to 270 employees since its founding in 2003: “If we forced our salaried employees to work 70 hours and only paid them for 40 hours, we could save some money in the short term, but we would hurt morale and lose many of our workers.”
Nate Barr, who owns Zootility, a multi-use tool manufacturing company in Portland’s East Bayside neighborhood, notes that a strong overtime threshold makes business sense for small business owners.
“I want my employees to come to work rested and re-energized, not exhausted and resentful that I’m making them neglect their families and work for free,” said Barr. “A lower overtime threshold is penny wise and pound foolish. If we want to grow scalable businesses and improve Maine’s economy, we need to treat our workers well.”