Voters Raised The Minimum Wage, But The Maine Governor Put It On Hold

A minimum wage hike passed easily in November, but the governor won't enforce the change until legislators have had a chance to overturn it.

Just five weeks after voters approved a proposal to increase the state's minimum wage, Maine's governor has ordered officials not to enforce parts of the raise until the state legislature has had a chance to pass a new law overturning it.

Republican Governor Paul LePage instructed his state labor agency to temporarily ignore parts of a new minimum wage law that was passed by voters on Nov. 8. The law would raise the state minimum wage for tipped workers, such as waitresses, from $3.75 an hour to $5 an hour.

The change was due to go into effect on Jan. 7, but LaPage instructed officials not to enforce it until the end of January. By then, he said, the state legislature will be in session and "many legislators have announced a bill" that would eliminate the minimum wage hike for tipped workers.

The Governor's action's are an example of a power struggle going on all over the country, pitting voters, who broadly support increasing the minimum wage at the ballot box, against Republican-controlled state houses, which have worked to delay or nullify such changes.

Ohio Governor John Kasich signed legislation Monday blocking a planned referendum in Cleveland proposing to raise the city's minimum wage to $15 per hour. The new law signed by Kasich bars cities and localities in the state from raising the minimum wage above the state's wage floor of $8.10 per hour.

The battle in Maine revolves around labor law that allows employers to pay tipped workers less than the minimum wage, with the expectation that tips make up the difference. In Maine, the wage floor for tipped workers is currently half the regular state minimum wage.

The Restaurant Opportunities Center, a labor advocacy group in the industry, has called the two-tiered wage system "legalized gender inequity," for its role in preserving the gender pay gap, since 66% of tipped workers are women.

In November, 55% of Maine citizens voted in favor of a law raising the minimum wage from $7.50 an hour to $12 an hour by 2020, with the minimum initially rising to $9 an hour in Jan. 2017. The law came with the additional provision that the sub-minimum wage and tip credit be phased out altogether. LePage has not opposed enforcement of that raise to $9, only the regulation affecting tipped workers.

It's "definitely a misuse of Gov. Page’s office to single out one part of the increase for non-enforcement for political ends," said Mike Tipping, Communications Director for the Mainers for Fair Wages campaign, which organized the successful ballot initiative.

"Obviously we think he ought to enforce the laws and it’s a misuse of his office and a slap in the face to 417,132 voters who passed the raise," Tipping said.

Maine Department of Labor spokesperson Julie Rabinowitz told BuzzFeed News that the agency will be “educating employers if we receive a complaint, but not opening an investigation or fining the employer.”

While legislators have discussed restoring a tip credit, she said that the tipped minimum wage raise could still survive in some form.

“The tip credit will not be phased out until at least 2026, so one possible option of ‘restoring’ [the credit] would be to keep the ‘old’ language of half the state minimum wage, that would actually guarantee that tipped workers receive a raise in their direct wage every year," she said.

Maine Commissioner of Labor Jeanne Paquette compared the state's wage hike — and the governor's order to delay it — to another high-profile wage boost that was recently put on hold.

“We have seen with the federal overtime-exempt rule announced this year, employers did a lot of work to comply, and then the injunction put everything on hold, creating confusion for both workers and employers," she said in a statement. "We want to avoid a similar situation under state law."

The parallel is apt. After President Obama raised the salary threshold for workers who qualify for overtime pay, from $23,660 to $47,476, a federal judge in Texas issued a nation-wide injunction against the labor rule, delaying enforcement.

Some businesses had already adjusted their salary and pay practices, and some workers, including those at Walmart, will keep their resulting raises. Other employers rescinded the raises after the injunction, and many believe the Trump administration will choose not to defend the Obama-era regulation.

In Maine, labor advocate Tipping is optimistic that a narrow Democratic majority in the state House (the state Senate has a narrow Republican majority) will protect legal challenges to the raise for tipped workers.

"It would have to go through both chambers and I just don't see Democrats passing it," he said of a bill to restore the tip credit. "They don't want to go against the will of the people, so clearly expressed, so recently."

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