Ring in the New Year With the Correct Minimum Wage in 2026

As of January 1, 2026, Maine’s statewide minimum wage is scheduled to adjust pursuant to state law requiring annual increases tied to the cost-of-living index. The official 2026 statewide rate announced by the Maine Department of Labor is $15.10 per hour (up from $14.65 in 2025). The tipped minimum wage will also increase to $7.55 per hour. A reminder that Maine’s salary exempt threshold is also tied to the minimum wage, and accordingly, beginning on January 1, 2026, employers should make sure that salary exempt employees are making at least $871.16 per week (or $45,300.32 annually).

Maine law also requires employers to comply with related record-keeping obligations, including maintaining accurate records of hours worked, wages paid, tip credits taken, and any service charges allocated to employees. Employers are reminded to order the current minimum wage notice from the Maine Department of Labor or download it from the department’s website, print it, and post it. This should be posted in a conspicuous place.

City of Portland Minimum Wage Increases Through 2028

For those Maine employers with a location in Portland, a reminder that Portland has set its own minimum wage and, in November, voted to increase it above the statewide rate. The rates that will go into effect in Portland include:

• Effective January 1, 2026: $16.75 per hour
• Effective January 1, 2027: $17.75 per hour
• Effective January 1, 2028: $19.00 per hour

Beginning in 2029, Portland’s minimum wage will be subject to annual cost-of-living adjustments. Employers with employees performing work within Portland’s city limits must ensure that their pay practices, notices, and timekeeping comply with these local thresholds on the effective dates.

Impact on Tipped Workers in Portland

Portland permits a tip credit, with tipped employees earning one-half of the city’s minimum wage, provided tips actually received make up the difference to at least the full applicable minimum wage for all hours worked. The tipped minimum wage will rise alongside the city rate:

• Effective January 1, 2026: $8.38 per hour (half of $16.75)

Employers must track tips accurately each pay period and must make up any shortfall if an employee’s direct wages plus tips do not reach the full required minimum wage. Employers should maintain documentation of tip allocations, tip pooling arrangements (if any), and reconciliations demonstrating compliance each pay period. Employers are reminded that supervisors, managers, and business owners should not participate in a tip pool if their organization implements a tip pool process.

Practical Compliance Steps for 2026 and Beyond

• Audit pay rates and classifications: Identify all employees working in Portland and other Maine locations; ensure base rates meet or exceed the highest applicable minimum wage on each effective date. A reminder that Maine’s Equal Pay Act does not allow for a defense to claims of differences in rate of pay based on geographic location.
• Update payroll systems: Make sure that you have updated payroll systems to account for the increase in the minimum wage rate beginning on January 1.
• Verify tip credit compliance: Update tipped rates, revise tip pooling policies as needed, and implement end-of-pay-period true-up processes to cover any shortfalls.
• Enhance timekeeping and record-keeping: Ensure systems accurately capture hours worked in Portland versus other locations, especially if your employees are working at or around minimum wage; retain records consistent with state and local requirements and maintain required postings.
• Train managers and HR/payroll staff: Provide training on rate changes, scheduling impacts, overtime interplay, and tip reconciliation obligations; communicate changes to employees in advance of each effective date.

Making sure your company is compliant with current wage and hour laws will reduce the risk of an employee wage and hour suit and penalties that the Department of Labor may assess in workplace investigations. For more information about your obligations under Maine wage and hour laws, contact Tawny or a member of Verrill’s Labor and Employment Practice Group.