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An Act To Help Small Businesses by Establishing an Alternate Minimum Wage
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 26 MRSA §42-B, sub-§1, ¶F, as enacted by PL 2017, c. 219, §2, is amended to read:
 
F. Minimum wage and overtime provisions as described in sectionsections 664 and 664-A.
Sec. 2. 26 MRSA §664, sub-§2, as amended by PL 2017, c. 272, §1, is further amended to read:
 
2. Tip credit.   An employer may consider tips as part of the wages of a service employee, but such a tip credit may not exceed 50% of the minimum hourly wage established in this section, or, if applicable, section 664-A, except that from January 1, 2017 to December 31, 2017, the minimum cash wage paid directly to a tipped service employee may not be less than $5.00 per hour. An employer who elects to use the tip credit must inform the affected employee in advance, as provided for in this subsection, and must be able to show that the employee receives at least the minimum hourly wage when direct wages and the tip credit are combined within the established 7-day workweek. Upon a satisfactory showing by the employee or the employee's representative that the actual tips received were less than the tip credit, the employer shall increase the direct wages by the difference.
 
The tips received by a service employee become the property of the employee and may not be shared with the employer. Tips that are automatically included in the customer's bill or that are charged to a credit card must be treated like tips given to the service employee. A tip that is charged to a credit card must be paid by the employer to the employee by the next regular payday and may not be held while the employer is awaiting reimbursement from a credit card company. The employer may not deduct any amount from employee tips charged to a credit card, including, but not limited to, service fees assessed to the employer in connection with the credit card transaction.
 
An employer who elects to use the tip credit must inform the affected employee in advance, either orally or in writing, of the following information:
 
A. The amount of the direct wage to be paid by the employer to the tipped employee;
 
B. The amount of tips to be credited as wages toward the minimum wage;
 
C. That the amount of tips to be credited as wages may not exceed the value of the tips actually received by the employee;
 
D. That all tips received by the affected employee must be retained by the employee, except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips in accordance with subsection 2-A;
 
E. That the tip credit may not apply to any employee who has not been informed by the employer of the provisions for a tip credit; and
 
F. If the employer uses a tip pooling arrangement, any required tip pool contribution amount from the employee.
Sec. 3.  26 MRSA §664-A  is enacted to read:
§ 664-A. Alternate minimum wages
 
1.  Small employer; defined.     As used in this section, unless the context otherwise indicates, "small employer" means an employer whose annual gross sales made or business conducted is less than $500,000, exclusive of sales and excise taxes collected at the retail level.
 
2.  Minimum wages for employees of small employers, certain employees in training and minor employees.     Notwithstanding section 664, the minimum hourly wage:
 
A.  For an employee of a small employer, starting January 1, 2020, is $9.75. Starting January 1, 2021, and every January 1st thereafter, the minimum hourly wage then in effect pursuant to this paragraph must be increased by the increase, if any, in the cost of living as determined in section 664, subsection 1;
 
B.  For an employee under 20 years of age, during the first 90 consecutive days of employment, starting January 1, 2020, is $9.75. Starting January 1, 2021, and every January 1st thereafter, the minimum hourly wage then in effect pursuant to this paragraph must be increased by the increase, if any, in the cost of living as determined in section 664, subsection 1; and
 
C.  For an employee under 18 years of age, starting January 1, 2020, is $9.75. Starting January 1, 2021, and every January 1st thereafter, the minimum hourly wage then in effect pursuant to this paragraph must be increased by the increase, if any, in the cost of living as determined in section 664, subsection 1.
 
3.  Prohibition.     An employer may not take any action to displace an employee, including a partial displacement through a reduction in hours, wages or employment benefits, in order to hire another employee at a wage authorized by this section.
 
SUMMARY
This bill creates an alternate minimum wage applicable to employees of a small employer, to the first 90 consecutive days of employment for employees who are under 20 years of age and to employees who are under 18 years of age. The wage is $9.75 starting January 1, 2020 and will be increased by any increase in the cost of living starting January 1, 2021 and every subsequent January 1st.