New laws aim to boost Department of Labor amid concerns over lack of enforcement

After the Maine Department of Labor sounded the alarm that it lacks the ability to deter employers from breaking wage and hour laws, the Legislature approved several new reforms to empower the agency to better protect workers. 

One bill approved this legislative session was LD 2184, a rule proposed by the Department of Labor (DOL) itself. That legislation seeks to simplify the process for imposing penalties for labor violations, modify the appeals process and allocate resources more effectively by proactively investigating labor violations rather than waiting for a complaint to be made. 

Gov. Janet Mills signed the measure in March after it was approved by the Legislature in primarily party-line votes, with most Democrats supporting the measure and Republicans opposing it.  

The new rules come after the DOL in a February report outlined how it has struggled to create stiff enough penalties to deter bad behavior from employers. Last year, for example, Maine employers faced average penalties of just 39 cents per wage and hour violation and could expect a Department of Labor investigation about once every 323 years.

The unlikely chance of being investigated and the low average penalty combine to create a deterrent effect that has been “non-existent in past years,” the DOL wrote.  

In testimony before the Legislature, Dr. Jason Moyer-Lee, director of labor standards at the Maine Department of Labor, put an even finer point on the current situation. He said he is responsible for enforcing laws related to the employment of minors and the payment of wages along with other statutes designed to protect workers. 

Labor report highlights scant enforcement of wage and hour laws

“With the tools currently at my disposal, I cannot effectively do that,” Moyer-Lee said, adding that while most employers follow the law, some do not.

“We cannot address the matter of noncompliance without a deterrent effect: it must be costly to break the law,” he continued. 

The new rules seek to “make the civil money penalties more effective by increasing the deterrent effect associated with violations,” the DOL wrote. “This is done by making initial penalties higher and making the criteria for penalty reductions more stringent.” 

In the same vein of better enforcing labor laws, the DOL also supported another measure, LD 372, to create a more streamlined process for recovering stolen wages. 

Sponsored by Sen. Mike Tipping (D-Penobscot), the bill allows the Bureau of Labor Standards within the DOL to order an employer to pay unpaid wages, along with damages equal to twice the amount of those wages and a reasonable rate of interest.  

The measure also requires the Attorney General’s Office to institute a civil action to recover any unpaid wages, damages or interest and allows the DOL to receive the owed compensation, damages or interest on behalf of a worker to then pay to the employee. 

Tipping said earlier this year that the purpose of the bill is to allow the state to directly recover what workers are owed. Currently, he said the DOL has to engage in a court action for such repayment to take place, forcing the state to spend unnecessary amounts of money to enforce wage law. Tipping also noted that wage theft continues to be a pressing issue around the country, with some estimates finding that workers could be losing upwards of $50 billion a year because of such actions.

Mills signed the measure into law on Monday. 

During the legislative process, the bill received support from Democrats while Republicans opposed it. One member of the GOP, Rep. Joshua Morris of Turner, proposed an amendment that would have reduced the amount of damages the Bureau of Labor Standards could order and would have allowed that penalty to be levied only if the violation is found to be “willful.” The Maine House voted down that amendment. 

While those measures passed, some other labor reforms were either rejected or are in legislative limbo. 

On Tuesday, Mills vetoed several bills designed to expand rights for farmworkers. One of those bills would have required that farmworkers be paid at least the minimum wage while the other would have given them the right to discuss wages and engage in other concerted activity.  

Mills vetoed the minimum wage bill largely because lawmakers added in a provision that would have allowed farmworkers to bring their own private lawsuit against their employer if the statute were violated. The governor insisted that the DOL should be in charge of enforcing the law, despite the department’s concerns about its current overall enforcement ability. 

Several other workers’ rights bills passed initial votes in the Legislature but may not be ultimately enacted. That’s because those proposals — which include bills requiring pay for reporting to work, permitting workers to request flexible work schedules, mandating the disclosure of pay ranges in job advertisements, protecting workers from employer surveillance, and preventing employers from holding workers liable for repaying training costs — were sent to the Appropriations and Financial Affairs Committee for funding consideration. 

Although the committee determined that the DOL could absorb the costs of the proposals, the Senate ultimately tabled the measures, leaving them as unfinished business. If no additional action is taken, the bills will not become law. 

Another proposal caught up in the funding process is a measure sponsored by Tipping that would expand the number of workers in Maine who receive overtime pay. The bill would adjust the amount an employee has to make yearly to be exempt from overtime pay to $55,068 or the annual rate stipulated by the federal Fair Labor Standards Act, whichever is higher.

The measure is similar to a nationwide rule finalized by the Biden administration on Tuesday, although Tipping’s proposal would update the overtime exemption threshold more frequently than the federal rule.   

Another bill before the Appropriations and Financial Affairs Committee would raise Maine’s minimum wage to $15 an hour. The minimum wage is currently $14.15 an hour. It is not yet clear if or when the committee will reconvene to fund this and other bills with remaining appropriations.