The new year brought new improvements to job quality for Maine workers, as the minimum wage increased and a new, statewide law to provide paid time off went into effect.
Both changes will put more money in Mainers’ pockets, with benefits that will ripple throughout the state’s economy. When workers – especially the low-wage workers most likely to benefit from the changes in Maine’s labor law – have more money, they spend that extra income in ways that support jobs and spur further economic growth.
85 percent of Mainers gain guarantee of paid time off
Starting January 1, almost every Maine worker[1] employed by a business with more than 10 workers has the right to accrue up to 40 hours of paid time off. That’s time that can be used if the worker or a member of their family gets sick, if their kid’s daycare closes unexpectedly, or for any other reason.
While other states have laws requiring paid sick leave, Maine became the first state in the nation to create a broader policy for paid time off when the law was approved in 2019. The law covers approximately 85 percent of Maine workers, or roughly 493,000 Mainers.
Everyone gets sick, but not everyone can afford to take time off work to get better or to care for a sick family member. Workers who lack paid time off are made to choose between their health and their livelihoods. The choice is costly: A 2018 analysis by MECEP found that Mainers lost roughly $115 million of income annually to unpaid sick leave.
The new law for paid time off will help Mainers recoup some of those costs and ensure that more workers can still pay their bills even if they need to take some time off.
One in five Maine workers to benefit from minimum wage increase
The minimum wage increase, from $12 to $12.15, will boost wages for roughly one in five Maine workers, according to MECEP analysis of the US Census Bureau data.[2]
- Roughly 52,900 workers who were earning less than $12.15 on December 31 received a direct wage increase on January 1.
- Another 67,100 workers are likely to see their wages go up this year as an indirect result of the minimum wage increase, as employers adjust wage scales.
The minimum wage increase is the first-ever automatic adjustment to reflect changes to the cost of living. This practice, known as “indexing,” helps ensure the value of the minimum does not erode over time. Indexing was approved by Maine voters as part of the 2016 minimum wage referendum. Maine’s minimum wage is indexed to the US Bureau of Labor’s Consumer Price Index.
MECEP’s prior research on Maine’s minimum wage increases points to a number of benefits, including reductions in the number of children living in poverty and larger earnings for low-wage workers.
MECEP fought for job quality improvements
Improving job quality is critical to building a stronger, fairer economy for Maine. That’s why MECEP was a leader in the campaign to raise Maine’s minimum wage, and a key advocate for the state’s new paid time off policy.
This year’s policy changes are steps in the right direction and will bring real benefit to Maine families and communities.
Notes
[1] Employees of certain seasonal businesses may not be eligible under the law even if the business has more than 10 employees. See https://www.maine.gov/labor/labor_laws/earnedpaidleave/ for more information.
[2] Current Population Survey, Outgoing Rotation Group, September-November 2020.
