Maine employers face bigger fines for violating labor laws governing minimum wage, overtime and other standards, but also will benefit from expanded opportunities to appeal penalties as part of a state rule that took effect Thursday.

The Maine Department of Labor said light fines and low penalty collections – only $250 in minimum wage fines were collected in 2023 – prompted the rule issued last year by the Bureau of Labor Standards. It also requires the state to study the extent of unreported labor law violations in Maine and come up with a strategy to address the violations.

“A crucial component of effective labor law enforcement is deterrence,” said Jason Moyer-Lee, director of the Bureau of Labor Standards. “It must be costlier to disobey the law than to obey it.”

Effective enforcement also must be rigorous about due process and should be based on evidence and be transparent, he said.

State labor laws frequently set out a penalty range for violations, and those limits are unaffected by the rule, the Department of Labor said. Fines previously would start at the minimum level and often decline.

Under the new rule, most violations would start with a $1,000 fine that would be reduced by considering factors such as the size of the employer, repeat violations, the severity of the violation or if the fine for a violation is capped at a lower amount.

For instance, for a minimum wage violation, the minimum penalty is $50 and the maximum penalty is $200 per violation.

Due to “more stringent criteria” in the new rule, minimum wage violations would likely result in the maximum $200 penalty, the Department of Labor said.

Agency officials said the new rule is part of “strategic enforcement efforts” using resources and tools to achieve “widespread and long-lasting compliance with labor laws.”

In a report earlier this year, the Bureau of Labor’s core enforcement mandate says the director of Labor Standards shall “cause to be enforced” laws regulating the employment of minors, payment of wages and all laws enacted to protect workers.

“With the tools currently at our disposal, we cannot effectively ’cause to be enforced’ all laws,” the agency said.

Businesses face a negligible chance they will be investigated and the average penalty collected per violation last year was 39 cents, according to the report. Penalties of about $18,000 were collected in 2017, which the state said was the “total cost” for an estimated $30 million in wage theft from minimum wage workers.

State labor officials said that beginning last year, they shifted increasingly toward “strategic enforcement” of Maine labor laws and a more effective use of resources. The agency said it introduced a formal process to make a priority of complaints and identify strategic investigations, initiated more companywide audits, stopped issuing citation letters with no penalty and began a rulemaking process to increase fines.