February 28 Ruling is Conclusion of ~18 Months of Litigation Over St. Louis Minimum Wage
On February 28, 2017, the Missouri Supreme Court issued a ruling rejecting a challenge to the City of St. Louis’s 2015 enactment of a local minimum wage law, in the process affirming the City’s efforts to raise its minimum wage from the state minimum wage of $7.65 in 2015 to $11 per hour by 2018 through a series of annual incremental increases.
A collection of employers and trade groups had filed a lawsuit against the St. Louis ordinance shortly after it was enacted in 2015, arguing that state law pre-empted the City’s attempts to enact a minimum wage higher than the state minimum wage and that the City’s minimum wage law exceeded the City’s authority under its own charter. In October 2015, a St. Louis City judge entered an injunction preventing the City’s new minimum wage law from going into effect.
In its recent ruling, the Missouri Supreme Court rejected the arguments of the plaintiffs challenging the City’s law, holding that the state law enacted in 2015 to try to specifically pre-empt the City’s law was improperly enacted, and that more general provisions of state law did not prevent the City from enacting a minimum wage higher than the State’s.
“Here, the state established a floor for employee wages, and St. Louis simply raised that floor for local employees based on local conditions,” the Court wrote in its opinion. “Finding no reason to diverge from well-established precedent, this Court holds [the City’s ordinance] does not conflict with Missouri’s minimum wage law.”
What Does Ruling Mean for City Employers – If It Takes Effect?
So what does this mean for employers in the City of St. Louis? At this point, although the answer is not certain, some relatively safe predictions can be made.
First, as noted in an explanatory post on the City’s web site, “Implementing a Higher Minimum Wage in the City of St. Louis,” due to delays typical after the entry of a Missouri Supreme Court judgment, the City’s minimum wage ordinance is not immediately in effect following the February 28 ruling. Rather, the Supreme Court’s ruling will not become final for a minimum of 15 days after the Court’s February 28 ruling, or not until March 15. If a party files a motion for reconsideration, the Supreme Court’s ruling won’t become final until that motion is ruled upon. However, given the Court’s unanimous agreement on upholding the City’s ordinance, any post-judgment delay in unlikely to materially delay finality of the Supreme Court’s order, a formal requirement for the trial’s court’s injunction to be lifting.
If the City’s ordinance were allowed to take effect when the trial court’s injunction is lifted, the City’s minimum wage would increase to $10 per hour immediately, and $11 per hour on January 1, 2018 (the City’s ordinance does have exemptions for employers with less than $500,000 in gross annual revenue, as well as employers with no more than 15 employees on a weekly basis).
The City’s web post quotes outgoing Mayor Francis Slay as stating that businesses will be given “a reasonable grace period to adjust to the new minimum wage rate,” but does not provide additional detail.
Action in Missouri General Assembly Likely to Pre-empt City’s Law
Ultimately, however, the current uncertainty may not matter, given that the Missouri General Assembly appears likely to pass legislation to again attempt to pre-empt the City’s ordinance. At the time of this writing, multiple bills were pending in the Missouri House and at least one was pending in the Missouri Senate. While state legislation in 2015 designed to pre-empt the City’s minimum wage law was held invalid because it violated Missouri’s constitutional prohibition on containing more than one subject, legislation this year is unlikely to repeat the same error. Some media reports have indicated that legislators hope to pass a new pre-emption statute before leaving for their Spring Break the week of March 20.
Tueth Keeney employment and labor law attorneys will continue to monitor this issue and report additional developments here on this blog. In the meantime, feel free to contact your Tueth Keeney attorney for further practical advice.