Nearly 100,000 Maine Workers to See Wage Increases in January 2025 with Rise in State Minimum Wage

PHOTO: Worker Melissa Stevens speaks at a press conference in 2016 with boxes of petitions to get a minimum wage increase on the ballot.

Maine workers earning minimum wage will see boost in their paychecks starting in January 2025 thanks to the 2016 minimum wage referendum law approved by voters at the ballot box. The minimum wage will increase 50 cents from $14.15 to $14.65 an hour as of Jan. 1, 2025 based on recent data from the U.S. Department of Labor's Bureau of Labor Statistics.

For a full-time, year-round worker, the increase is equivalent to an extra $1,000 a year in additional wages. The increase will impact an estimated 37,000 workers earning below the new minimum wage plus 50,000 indirectly-impacted workers who earn up to 15 percent more than the minimum wage and will see a smaller increase in their hourly rate as employers stay competitive with the new minimum wage, according to the Maine Center for Economic Policy.

The Maine AFL-CIO was part of the coalition that fought to pass the 2016 minimum wage referendum, which requires annual adjustments to the minimum wage based on the cost-of-living index (CPI-W) for the Northeast Region. Between August 2023 and August 2024, there was a 3.6 percent increase in the CPI-W.

In addition to the minimum wage, about 9,000 tipped employees in Maine will see an increase in the "tipped wage" to $7.33 per hour. This means that service employees must receive at least a direct cash wage of $7.33 per hour from the employer. The employer must be able to show that the employee receives at least the minimum wage of $14.65 per hour when the direct wage and tips are combined at the end of the week. The amount of tips necessary to qualify as a service employee will increase from $179 per month to $185 per month.

That wage hike will affect about 1 in 6 Maine workers, but it's also “one of the smallest impacts of a minimum wage increase in the state in years,” according to James Myall, an analyst at the Maine Center for Economic Policy.

“This is because wage growth has been unusually strong for Mainers in low-income occupations in recent years, resulting in fewer Mainers than ever earning at or near the state minimum,” wrote Myall. “Nonetheless, the fact that tens of thousands of workers are impacted demonstrates the need to maintain a robust minimum wage so that no one is left behind.”

As a result of the minimum wage hike, the minimum salary threshold for overtime exempt workers has risen to $1,128 a week, or $58,656 a year, according to MDOL. The minimum wage is one of the factors that determines where that threshold is set under state and federal law.

Maine voters approved hiking the state’s minimum wage in a 2016 referendum. That raised the minimum wage from $7.50 to $9 an hour in 2017 and by an additional dollar a year through 2020 after which it was indexed to inflation.

During the minimum wage referendum campaign eight years ago, Governor Paul LePage said the measure would push senior citizens “to the brink of survival” and that backers of the proposal “should be jailed” for “attempted murder.” None of his hyperbolic warnings have come to pass.