June 28, 2017 Missouri legislature passes bill to overturn St. Louis minimum wage increase The Missouri legislature passed HB 1194, a bill that overturns the St. Louis minimum wage increase to $10 effective May 5, 2017, and $11 effective January 1, 2018. The law also blocks Kansas City from increasing its minimum wage. The governor is expected to sign off on the measure. According to the bill language, the bill preempts and nullifies all political subdivision ordinances, rules, and regulations currently in effect or later enacted relating to the establishment or enforcement of a minimum or living wage or the provision of employment benefits (i.e., paid sick leave) that exceed state laws, rules, or regulations. An emergency clause in the bill that would have made the law effective immediately was defeated prior to passage. As a result, the bill would be effective August 28, 2017, if enacted. According to a St. Louis City news release, "The City of St. Louis' minimum wage ordinance, which requires covered employers to pay workers $10 an hour as opposed to the State's minimum wage rate of $7.70 an hour, remains in effect. Covered employers are obligated under the law to comply with the City's minimum wage rate until at least August 28, 2017." St. Louis Mayor Lyda Krewson said, "This is a setback for working families. $7.70 is not enough. I will work with others to get an increase in the minimum wage on the ballot since our state legislature won't address it." Missouri Supreme Court ruling allowed St. Louis minimum wage increase to take effect The St. Louis minimum wage increased to $10 on May 5, 2017 because a Circuit Court lifted the injunction that in 2015 blocked the ordinance from becoming law. Effective January 1, 2018, the city minimum wage is scheduled to increase to $11. On April 25, 2017, the Missouri Supreme Court reaffirmed that the city's minimum wage ordinance increasing the St. Louis city minimum wage to $10 per hour for the remainder of 2017 and $11 per hour beginning in 2018 was valid. The only remaining barrier to the minimum wage increase was the Circuit Court's injunction in 2015, which was lifted on May 4, 2017. As we reported previously, the ordinance was originally enacted in 2015, but blocked from taking effect by a Circuit Court during that same year. The city appealed this decision to the state's highest court, where the Court in February 2017 unanimously ruled that state law did not prohibit a higher minimum wage for localities, but instead set a floor for the state's minimum wage. Opponents of the city minimum wage increase filed a motion with the Court in mid-March 2017, asking the Court to reconsider its decision. On April 25, 2017, the Court declined to reconsider its February 2017 decision. Business owners that have questions about the minimum wage increase may email the city at minimumwage@stlouis-mo.gov. Questions or concerns also may be made through the Citizens' Service Bureau by calling +1 314 622 4800 Noncompliance to the City's established ordinance is subject to prosecution in Municipal Court, and also may be subject to revocation of business licenses and occupancy permits. Should HB 1194 be signed into law, as anticipated, St. Louis employers are faced with a dilemma — those that have complied with the minimum wage increase as of May 5, 2017 must decide whether to continue to pay at $10 per hour as of August 28, 2017, or revert back to the state minimum wage of $7.70 (or something in between). St. Louis employers that were waiting to see what happened with the legislature must decide whether to temporarily increase employee wages or risk the threat of city sanctions. Kansas City also aims to increase minimum wage On March 9, 2017, the Kansas City Missouri Council passed an ordinance to establish a municipal minimum wage of $8.50 an hour, effective September 18, 2017. The ordinance also calls for minimum pay rate to gradually increase, reaching $13 per hour by January 1, 2023. The minimum wage can be increased or decreased by the cost of living in place on January 1, 2024, and each year thereafter. Kansas City voters will vote on the issue on August 8, 2017, when a $15 per hour minimum wage proposal appears on the ballot. The City Council agreed in February 2017 to comply with a Missouri Supreme Court order to put a petition initiative for a higher minimum wage on the ballot. The proposal calls for raising the minimum wage to $10 per hour by Sept. 1 and gradually to $15 per hour by 2022. Should the governor sign HB 1194 into law as anticipated, and Kansas City voters approve the minimum wage initiative on August 8, it is expected that court challenges on both sides will ensue. Ernst & Young LLP insights Several states have recently passed legislation (i.e., Arkansas, Iowa, Ohio, South Carolina) to halt the trend of cities/localities passing ordinances that require employee benefits such as paid sick leave for individuals working within the city's boundaries. ———————————————
——————————————— EY Payroll News Flash
| |||||||||||
| |||||||||||
