Gov. Paul LePage says a federal proposal to expand worker eligibility for overtime pay is a “one-size-fits-all policy” that would hurt almost every employer and industry in Maine.

The proposed changes to overtime rules, unveiled by the White House in July, would add an estimated 5 million people nationally to those eligible for time-and-a-half pay for working over 40 hours a week. That would be accomplished by more than doubling the minimum annual salary certain workers could earn before becoming exempt from receiving overtime pay, from $23,660 to $50,440.

An estimated 20,000 workers in Maine could benefit from the change, or about 4 percent of the roughly 500,000 full-time workers in the state in 2013, according to Maine Department of Labor statistics.

The U.S. Department of Labor is accepting public comment on the proposed changes through Friday, which prompted Maine officials to weigh in on the issue publicly. Their comments were included in a news release issued Friday.

“Maine’s economy is not like that of other states, and this approach will not benefit our people,” LePage said in the release.

State Commissioner of Labor Jeanne Paquette said abrupt changes to the way Maine businesses plan to meet their staffing needs would have far-reaching effects on the companies and would not necessarily benefit workers.


“Many workers who see this proposal as an automatic raise will have their expectations crushed when their employers revise their job duties to avoid paying the increase,” Paquette said in the release. “Having the federal government impose regulations in this manner and time frame will likely not result as intended in Maine.”

Currently, any full-time salaried employee who has supervisory duties and earns more than $455 a week, or $23,660 a year, isn’t eligible for overtime. The plan from the U.S. Department of Labor would more than double that limit, meaning that salaried workers who earn up to $970 a week, or $50,440 a year, would be eligible to receive overtime. Eligibility would be determined by annual salary and job duties, and would not include any overtime earnings.

There are two tests for determining whether full-time salaried workers can earn overtime: the income limit and a so-called “duties” test. The duties test determines whether the workers meet the definition of managers – people who spend more than half their time overseeing other workers, set work schedules and perform other management tasks that make them exempt from overtime pay.

If approved by the federal Department of Labor, the rule changes would take effect in 2016. Since the changes would not be made by an act of Congress, they could be vulnerable to legal challenges, Maine officials have said.

But Maine AFL-CIO Executive Director Matt Schlobohm said the LePage administration’s comments are a typical “Chicken Little response” to any changes designed to benefit workers.

“I think it would be a tremendously positive rule change for workers and for Maine’s economy,” he said.


Schlobohm said it is common sense that many workers making less than $50,440 a year should receive overtime pay for working more than 40 hours a week. Under the current rules, they essentially work those extra hours for free, he said.

Regardless of whether employers end up paying overtime or scaling back employee hours, the workers win, Schlobohm said.

“Some workers will get more money in their pockets,” he said. “Others will get more time with their family for the same pay.”

Portland Regional Chamber of Commerce CEO Christopher Hall said the proposed rule changes would have a significant impact on his small nonprofit organization. While it is nice for workers to earn more, he said, many employers are dealing with limited budgets and would struggle to accommodate the higher pay structure. Hall doesn’t believe that abruptly raising the floor for exempt workers is the right way to go.

“When you throw something like that at us, we have to find the savings somewhere else,” he said.

The Obama administration has said that the earnings limits have been updated only once since the 1970s. It argues that the limit has been eroded by inflation, and that a worker making $23,660 a year would be earning below the poverty level for a family of four. In 1975, the administration said, 65 percent of full-time salaried employees were eligible for overtime pay, and now less than 8 percent are eligible.

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