Do I have to pay overtime?
Statements on the required Maine Department of Labor, Wage & Hour Posters, suggest that Maine restaurants are exempt from paying overtime. That statement is no longer accurate.
Now, Maine employers must comply with BOTH, State & Federal law on overtime. Under these new rules most Maine employers must pay overtime after 40 hours in any workweek.
The first test to be declared exempt from overtime rules is that the business must do less than $500,000 per year in sales. Once you hit that $500,000 threshold, (figured at the end of each calendar quarter for the preceding four quarters) all non-salaried employees must be paid overtime for all hours over 40 at time-and-one-half their regular pay rate.
However, even if you do less than $500,000 per year, you may still have to pay some employees’ overtime. Any employee who engages in interstate commerce, regardless of your total sales volume, must be paid overtime.
The two most common examples of engaging in Interstate Commerce are:
1.) Employees that process credit cards (swiping the card) and
2.) Employees that handle freight that originated out of state and came DIRECTLY to your restaurant without stopping at another location or going through a warehouse first.
The overtime wage for regular employees is one and one half times their regular rate of pay times all hour in excess of forty hours in one workweek. Minimum, overtime wage for tipped employees is $7.00 per hour if their regular cash wage paid is $3.50 (see FAQ - "Minimum Wage" for calculation of overtime wages.)
The issue of which employees may be paid “on salary” has been simplified at the federal level and become more complex at the State level.
The basic tests of whether or not an employee may be compensated on a fixed salary vs. being subject to overtime are as follows:
- The employee’s primary duty is to manage the enterprise or a customarily recognized department of the enterprise. Maine defines primary duty as that which the employee performs more than 50% of the time
- The employee customarily and regularly directs the work of at least 2 other employees or their equivalent.
- The employee has the authority to hire and fire other employees, or his or her suggestions and recommendations as to the hiring, promotion, advancement, or any other change of status of employees given particular weight.
- The employee must be paid at least $455.00 per week on salary.
For more detail on this topic including the new “Learned and Creative Professional” duties test now allowed to chefs and other employees that may have completed higher education, just call the association 207-623-2178.
Maine Overtime - Salary Rules
Federal Overtime Rules
Click here to view the Department of Labor Guidelines