AUGUSTA — In a move that critics immediately denounced, the state Department of Labor said Thursday it won’t enforce a provision against employers who don’t comply with a change in the tip credit for workers for at least the first few weeks after it takes effect on Jan. 7.

It is only a temporary move to see how the issue plays out when the Legislature convenes next month, said Julie Rabinowitz, the department’s director of policy, operations and communication. It doesn’t change the legal requirement that employers compensate workers at the new, higher level.

“It is entirely appropriate for the Department of Labor to take time to help employers and workers understand and comply with the law without taking them to task,” Gov. Paul LePage said in a prepared statement that quickly drew criticism from the sponsors of the ballot initiative endorsed by Maine voters in November.

Mainers for Fair Wages Campaign Manager Amy Halsted said the governor “has now gone beyond ignoring the will of Maine voters and is flat-out encouraging employers to commit wage theft.”

“Refusing to enforce the minimum wage law, and especially the increase in the base wage for tipped workers from $3.75 to $5 an hour, is a slap in the face to tens of thousands of Mainers who are working hard and too often struggling to afford heat, food and medicine,” she said in a press release.

The ballot measure hiked the minimum wage from $7.50 to $9 starting in 2017, with annual increases locked in until it reaches $12 an hour. It also revised the tip credit rules so that employers will have to pay a greater share until the non-tip portion of a worker’s pay reaches the minimum wage level, probably in 2024.

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LePage said many lawmakers are planning to push to restore the tip credit rules. He has said many times he doesn’t think voters understood how the tip rule change would hurt employees and businesses that depend on tourism, especially restaurants.

On a radio show Thursday, the governor said the provisions covering the tip credit will have a “severe impact” on tourism unless lawmakers change it.

He also warned that indexing the minimum wage for inflation, which would begin in 2021, could pose a “devastating” blow if the New England Consumer Price Index were to escalate sharply, pushing up wage costs at a rapid clip.

Whatever changes, if any, the legislature might make won’t come in time to undermine the necessity for employers to follow the wage levels imposed by Question 4 on the Nov. 8 ballot.

Halsted said that Mainers for Fair Wages “will be leading a campaign to make sure employers know the law and that workers get the raises that more than 400,000 Maine voters just approved. If you work a job as a restaurant server, you should be receiving a $5 base wage plus your full tips as of Jan. 7. Anyone who says otherwise is lying.”

“Of course we expect employers to comply with the law,” Commissioner of Labor Jeanne Paquette said in a prepared statement.

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Paquette pointed out, however, that employers devoted a lot of time to making sure they were ready to meet the terms of a new federal overtime exemption rule slated to take effect on Dec. 1 that is now on hold because of a court order from a federal district judge in Texas. It probably won’t be resolved until the next president takes office.

Rabinowitz said there is a lot of confusion on the tip credit at the same time employers are trying to figure out which workers would be entitled to overtime under the new federal standard, if it is ever imposed.

Paquette said her department is aiming to avoid similar confusion about the tip rule and a related state overtime standard until the end of January in the hope that everything will be less chaotic by then.

LePage said on the radio that the minimum wage referendum may have sounded good to people but “the devil’s in the details” and he doesn’t think voters understood all of the related issues.

Though the state may not enforce every provision immediately, it did warn employers that if they shortchange workers they could wind up being sued if a worker believes he’s been harmed. If they lose, the state warned, they may have to pay back wages, treble damages, attorney’s fees and court costs.


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