AUGUSTA, Maine — Maine businesses that violate wage and labor laws covering their workers will face higher penalties under rules Gov. Janet Mills could soon approve.
Various Republican lawmakers and hospitality industry members have pushed back on the changes, arguing the Department of Labor will increase the burden on all businesses rather than only bad actors without providing specific data to justify the ramped-up enforcement.
But the rules the House and Senate approved last week with support from most Democrats and opposition from Republicans come after the department reported employers faced little deterrent against violations, with average penalties last year of only 39 cents per wage violation and investigations roughly once every 323 years.
“Our deterrent effect has been non-existent in past years,” the Bureau of Labor Standards wrote in its annual report published last month, with one wage and hour inspector for every 69,177 employees.
The effort to ramp up enforcement of Maine’s labor laws comes as the Mills administration hired a new wage enforcement director last year. Jason Moyer-Lee, Maine’s director of labor standards, started his new role in October. His background in labor rights includes several years as general secretary of the Independent Workers’ Union of Great Britain.
And it is part of the bureau’s shift in recent years towards “strategic enforcement” that uses a more proactive approach rather than waiting for complaints. The proposed rules would start initial penalties at $1,000 and decrease them in certain situations, such as when an employer demonstrates “good faith,” has fewer than 100 employees, is a first-time offender or did not commit a “grave” violation.
Various infractions have maximum penalty ranges that would remain below $1,000, such as $200 per minimum wage violation. The rules also toughen penalty reduction criteria and expand the appeals process, among other things.
“If we don’t enforce laws that protect workers, it’s like posting a speed limit on a highway and never having a state trooper sitting on the side of a highway with a radar gun,” said Jason Shedlock, president of the Maine State Building & Construction Trades Council.
The council’s roughly 6,500 skilled workers recognize many businesses “try to do the right thing” but feel “bad actors” are skating by without consequences in Maine’s growing economy, Shedlock added.
“The easiest way to lower your budget when it comes to a business is to look at finding ways to [lower] your labor line,” such as by shortchanging workers, Shedlock said.
Maine’s top industry for wage and hour complaint violations in 2023 was lodging and food services, with 3,134 violations, 64 resolved complaints and $3,750 in penalties, per the Department of Labor. The construction industry followed with 2,414 complaint violations, 17 resolved complaints and no penalties owed.
HospitalityMaine, which represents about 1,400 restaurants and lodging establishments, supports targeting bad actors, but it worries Moyer-Lee and the department are using anecdotes and “baseless data” to justify the new rules, government affairs director Nate Cloutier said.
“I worry what that shift could mean for the climate that has been fairly good between the Department of Labor and businesses,” Cloutier said, adding the industry supports “education-based enforcement.”
Labor Commissioner Laura Fortman said while “most employers comply with labor law, it is for everyone’s benefit that those who don’t be held accountable.”
Republican legislators who have publicly opposed the proposed rules include Sen. Matt Pouliot, R-Augusta, who echoed Cloutier’s support of focusing on education. The department is otherwise shifting to “outright, proactive guessing,” he said.
“Like a game of Whac-A-Mole,” Pouliot added.
The proposed rules awaiting the governor’s signature are joined by other labor-related bills moving through the Legislature before it seeks to adjourn by mid-April, including a measure from Sen. Mike Tipping, D-Orono, to let the state more quickly recover money owed to workers.
John Leavitt, business manager of the Northern New England chapter of the North Atlantic State Regional Council of Carpenters, said the misclassification of workers and other Maine labor issues have faced governors Angus King, John Baldacci, Paul LePage and now Mills. Leavitt supports the new changes to more proactively go after wage and labor violators.
“There’s zero incentive to play by the rules now,” Leavitt said. “It’s music to my ears to see the state finally talking about enforcement.”