The Maine Department of Labor (MDOL) announced Wednesday that, in compliance with state law, Maine’s minimum wage will be increased fifty cents an hour from $14.15 to $14.65 as of January 1, 2025 in order to keep pace with the cost of living.

Under current State Law, the hourly minimum wage must be increased in accordance with the cost of living as of August the previous year, rounded to the nearest five cents.

In addition to this, the new tip wage has been set at $7.33 per hour, up from $7.08, such that it remains at fifty percent of the minimum wage. The amount of tips earned per month in order to qualify as an eligible service worker was also increased from $179 per month to $185 per month.

The tip wage — sometimes referred to as a tip credit — essentially allows employers to pay certain workers less per hour so long as the tips they earn are sufficient enough for them to earn a sum that is at least equal to the minimum wage.

The minimum salary threshold for exempting a worker from overtime pay has also been increased to $1,128 a week, or $58,656 a year. In order for a worker to be exempted from overtime pay, their salary must exceed 3,000 times the State’s minimum wage or the annualized rate established by the US Department of Labor, whichever is higher.

That said, there are still a number of other factors used in determining whether a worker is exempt, meaning that an individual may still be eligible for overtime despite their earnings exceeding this threshold.

These various wage increases come as the Northeast Consumer Price Index revealed that the cost of living rose approximately 3.4 percent between August 2023 and August 2024.

In 2016, Maine voters approved a referendum incrementally increasing the minimum wage, beginning with a jump from $7.50 to $9 and increasing by an additional dollar annually until 2020, at which point it was indexed to inflation.

Although this measure also eliminated the statewide tip credit, it was quickly reinstated by lawmakers and former Gov. Paul LePage (R) in 2017.

Earlier this year, the Portland City Council considered a proposal that would have eliminated the City’s tip credit, a measure that was shot down by 61 percent of residents at the polls just two years prior.

Councilors voted 5-2 in August against placing this measure on the ballot, instead sending the proposal to the Housing and Economic Development Committee.

As of now, there is no clear timeline for when the proposed tip credit elimination could again come before the Portland City Council as a whole for further consideration.