Opponents of the new minimum wage law approved Tuesday by Maine voters said they plan to ask the Legislature to repeal or modify some aspects of the measure to protect restaurants and other small businesses from its “seismic” impact.

However, the lead organizer of the wage increase campaign, Amy Halsted, said it would be unwise for state lawmakers to defy the will of the people by trying to water down the voter-approved initiative, which raises Maine’s hourly minimum wage from $7.50 to $12 by 2020 for non-tipped workers, and by 2024 for workers who rely on tips. She said studies of other states with minimum wage increases similar to Maine’s show that businesses have not been hurt by them.

Representatives of Maine’s restaurant and retail industries said they are not seeking to roll back the $12 minimum wage, listed on Tuesday’s ballot as Question 4. Still, they cited two aspects of the measure they would like to see changed: the elimination of a “tip credit” for businesses with employees who receive a substantial portion of their income from tips, and a provision that ties future minimum wage increases to inflation.

“For restaurants in the state, the results of Question 4 are going to be, you know, seismic,” said Peter Gore, vice president of advocacy and government relations for the Maine State Chamber of Commerce. “I’m not sure if people fully comprehend what this is going to do to the many restaurants and small businesses they frequent.”

Gore said some state lawmakers already had agreed to consider taking up the minimum wage issue during the next session if Question 4 passed. Possible changes include a new tip credit to counteract some or all of the minimum wage increase for tipped workers. In addition, business leaders said they want the Legislature to put a cap on inflation-based annual wage increases, such as 3 percent.

“We did have legislators tell us last session that if this question passes, they would be willing to take a look at it,” Gore said.


But Halsted, campaign chairwoman of Mainers for Fair Wages, which organized the Question 4 initiative, said it would be a bad idea for Maine lawmakers to tamper with the measure. She said voters understood perfectly what they were voting for, including the tip credit elimination and inflation-indexed wage increases. Halsted also noted that more than 60 restaurants in Maine endorsed Question 4.

“I think it would be both wrong and very surprising for the Legislature to act against the will of the people,” Halsted said.

Question 4 raises Maine’s statewide hourly minimum wage from the current $7.50 to $9 in 2017, followed by annual $1 increases until it reaches $12 in 2020. Future increases will be indexed to inflation. It also increases the hourly minimum wage for workers who rely on tips from the current $3.75 to $5 in 2017, followed by annual $1 increases until it reaches the full minimum in 2024.

Under Maine’s previous minimum wage statute, businesses could leverage a “tip credit” of up to $3.75 an hour to offset the minimum wage paid to employees who receive substantial tips, such as food servers, bartenders, barbers and manicurists. The tip credit had the effect of reducing the minimum wage for tipped workers to $7.50 minus $3.75, or $3.75.

However, starting Jan. 1, that tip credit will be phased out in annual increments until is it eliminated completely in 2024. From that year forward, the minimum wage for tipped and non-tipped workers will be the same.

Voters approved the measure 55 percent to 45 percent, with 98 percent of precincts reporting as of Wednesday evening.


The industry representatives warned that the increase to $12 an hour for all workers, including those who receive tips, will have a devastating impact on many independently owned restaurants and other small businesses unless the Legislature intervenes.

“They’re going to raise prices on their menus, or they’re going to cut staff, or they’re going to go out of business,” said Steve Hewins, president and CEO of the Maine Restaurant Association and Maine Innkeepers Association.

Hewins said most restaurants operate on razor-thin margins and do not have the ability to increase wages without raising prices or cutting costs. It might not be as big an issue in places like Portland, where servers and other restaurant staff already earn higher wages, he said, but the increased payroll costs could cause serious problems in smaller towns and rural areas.

As written, the minimum wage increase also could cause significant problems for small retailers, said Curtis Picard, executive director of the Retail Association of Maine. Picard said that if inflation were to become significant in the future, it would cause a surge in the minimum wage that some retailers would not be able to handle. He said placing a maximum on the annual increases indexed to inflation would solve the problem.

“We’re OK with some level of indexing,” he said, “but can we cap it at 3 percent or something?”

Halsted said other states have passed minimum wage increases similar to Maine’s, and that the devastation to small businesses predicted by opponents of those measures has not occurred.

“The restaurant industries in those states are booming,” she said.


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