As of Friday, the Maine Department of Labor (MDOL) will have the authority to order employers to pay back wages, liquidated damages, and interest to workers affected by labor law violations.
Prior to this, the MDOL’s Wage and Hour Division was only able to compel an employer to pay owed wages by obtaining a judgement in court or if a settlement agreement was reached to do so.
This change comes as a bill approved by lawmakers along strictly party lines and signed into law by Gov. Janet Mills (D) in April of this year went into effect Friday.
LD 372 — sponsored by Sen. Mike Tipping (D-Penobscot) — was first introduced as a concept draft and later amended by the Labor and Housing Committee to confer this power upon the MDOL.
All Democratic members of the Committee voted to recommend this law’s passage, while both Republican members voted to support a more moderate version of the bill.
Under this new law, violators may be required to pay as much as “twice the amount of unpaid wages as liquidated damages and a reasonable rate of interest” in addition to the wages due.
Consequently, businesses in violation of state wage laws may need to pay as much as three times the amount an employee was underpaid, plus interest.
The Committee’s Republican-backed minority report would have allowed the MDOL to compel payment of up to double the amount of unpaid wages, plus interest.
An amendment offered on the floor of the House by Rep. Joshua Morris (R-Turner) would have required the director to provide “substantial evidence” that a given labor law violation was “willful” before compelling them to pay “liquidated damages” and interest.
This requirement would not, however, have applied to the MDOL’s ability to order businesses to give employees any unpaid wages they are owed.
Click Here to Read the Full Text of LD 372 As Approved
During this bill’s public hearing, several organizations representing various business interests in Maine offered testimony in opposition to this legislation, arguing that it assumes employers are acting in bad faith and would make the state a less attractive environment for businesses.
The Maine People’s Alliance, a left-wing political group that is also Sen. Tipping’s full-time employer, spoke in support of this legislation alongside state-level labor organizations, suggesting that it would serve to prevent the “exploitation of workers” and help “deter wage theft.”
“Employers must pay workers the wages they have earned, when they are due,” said Jason Moyer-Lee, Director of the Bureau of Labor Standards.
“When this doesn’t happen, we have historically lacked the power to order employers to make the workers whole as well as compensate them for having had to forego their wages,” Moyer-Lee continued. “Under this law, we now have that power and low-paid workers will benefit as a result.”
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