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LePage Signs Bill Into Law to Restore Maine Tip Credit

Kate Collins
Bangor Daily News
A server delivers a tray of food during the lunch rush at Governor's Restaurant in Bangor.

The Legislature and Gov. Paul LePage have repealed part of the minimum wage law enacted by voters in November 2016 by restoring the tip credit for Maine businesses that employ tipped workers.

Passage of the bill means that tipped workers, such as those in the service industry, will resume collecting tips and won’t see their minimum wage increase parallel with the rest of the state. Instead, starting in 2018 tipped workers’ salaries will be half the hourly minimum wage as long as tips bring their earnings to at least $9 an hour. The referendum, which passed with more than 55 percent of the vote, bumped the minimum wage for non-tipped workers to $9 per hour this year and will gradually raise it to $12 by 2020.

Though the bill passed 110-37 in the House and 23-12 in the Senate, it failed to receive a two-thirds endorsement in the latter body, which prevents it from going into effect as an emergency measure. Instead, it will take effect 90 days after the Legislature adjourns, which will be sometime following the busy summer tourist season.

The elimination of the tip credit has been a major argument against the minimum wage since months before the 2016 referendum, with opponents arguing that it could lead to lower wages for tipped workers who often earn far beyond minimum wage pay. The bill was sponsored by Sen. Roger Katz, R-Augusta.

In April, hundreds of people crowded into the State House for one of the most heavily attended and longest public hearings of 2017. Testimony in favor of the tip credit was not unanimous; many testified that in some areas of the state, tipped workers could earn more if they were paid the straight minimum wage.

LePage signed the bill into law on Friday, according to Peter Steele, LePage’s communications director.

This story appears through a media-sharing agreement with Bangor Daily News.