Court Strikes Down Municipal Minimum Wage Increase
A court recently held that a municipal minimum wage increase adopted by the City of St. Louis was preempted by the State’s minimum wage laws.
In Cooperative Home Care, Inc. et al. v. City of St. Louis, Missouri, the issue before the court was whether a municipal minimum wage increase was preempted by the Missouri state minimum wage law. Under state law, the minimum wage was established as $7.65. But on August 28, 2015, the Mayor of St. Louis signed an ordinance raising the minimum wage within the city to $8.25 per hour with additional increases to follow on an annual basis.
After a group of businesses challenged the new ordinance, the court enjoined enforcement of the ordinance on the grounds that it prohibited “several activities that are not considered violations of Missouri’s Minimum Wage Law . . . .” In reaching this decision, the court relied on reasoning that is similar to the doctrine of conflict preemption under Minnesota law, which provides that “a municipality may not prohibit by ordinance conduct that is not prohibited by statute.” Among other things, the court noted that: (i) the ordinance prohibited the payment of the minimum wage expressly authorized by state law; (ii) the ordinance created penalties for minimum wage violations that were separate and distinct from those authorized by state law; and (iii) the ordinance did not include the same exemptions and exceptions as the state law.
As we have previously reported, the Minneapolis City Council is actively considering adopting an ordinance that would set the minimum wage within the city as high as $15.00 per hour. According to recent press reports, the City Council is planning to commission a $150,000.00 study into the effects of this potential municipal minimum wage increase. The expectation is that the Minneapolis City Council may, at some point, seek to pass a municipal minimum wage ordinance similar to the one enacted and enjoined in St. Louis.
Takeaway: The recent decision enjoining the municipal minimum wage increase in St. Louis provides support for a potential future legal challenge to any municipal minimum wage increase adopted in Minneapolis. It would also potentially support a challenge to the paid sick leave ordinance also under consideration by the Minneapolis City Council.