The legislation amends the Maine Human Rights Act to make it a form of discrimination for an employer to ask about a potential new hire's previous wage before an offer is made.
The governor signed the legislation Friday at the Maine State House, surrounded by the bill's sponsors and co-sponsors.
Governor Mills said it will help ensure that people doing equal work will get equal compensation, no matter what they were paid before.
"What does it matter? How does that relate to your skills and your ability, your responsibilities, the ability to do the job. If you were underpaid in your previous job, should you be underpaid in your next job? I think not," said the governor.
According to Governor Mills, on average, men make 20 percent more than women after a year of employment in cases where they both have a bachelor's degree.
The bill's sponsor said when people are underpaid, it also hurts Maine's economy. She thanked the governor for her support.
"It's good for Maine taxpayers, because when women make what they are worth they will save more, they will accrue more social security benefits, and that will be good for all of us," said Sen. Cathy Breen, D - Falmouth.
She said the basis for the bill was actually brought to her by a legislative aide, Emily Cook.