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Friday, March 10, 2017

City of St. Louis Minimum Wage Ordinance

On February 28, 2017, the Missouri Supreme Court reinstated St. Louis City Ordinance 70078, available here, which requires covered employers to pay covered employees a minimum wage of $10/hour in 2017 and $11/hour starting January 1, 2018, for each hour worked while the employee is physically present in the City of St. Louis.  Employers governed by the ordinance include all businesses whose annual gross revenue is $500,000 or more and who have employed more than fifteen employees during each calendar week of the current and previous calendar years.  Employees covered by the ordinance include all employees who work at least twenty hours per year within City limits (with some exceptions, including seasonal educational camp workers and work-study students, among others).   Ordinance 70078 also mandates that the minimum wage will increase to reflect inflation each January first beginning in 2019.

In October 2015, this ordinance had previously been halted, by a trial court injunction as being in conflict with the state minimum wage law (The state minimum wage, per R.S.Mo. § 290.502, is currently $7.70/hour.)  However, the Missouri Supreme Court disagreed with the trial court, and in a unanimous decision, held that Ordinance 70078 is not in conflict with or preempted by state law and that the City was validly acting within its constitutional police powers in enacting the ordinance.  The Missouri Supreme Court held that Missouri’s minimum wage law sets “a floor below which an employee cannot be paid,” but does not set a maximum wage or prohibit cities from expanding the protection of the minimum wage law.

The decision appears to make the minimum wage effective immediately, though Mayor Slay has promised a “short, but reasonable, grace period” for businesses to comply.  On March 8, Mayor Slay also tweeted that “no action to enforce the minimum wage may be taken until . . . the [lower] court lifts its injunction.”  This statement seems to indicate that employers should prepare to comply with the new minimum wage now.  (The City has also set up an update page on compliance/enforcement, as well as an email address for questions.  Details can be found here.)  Compliance by businesses requires not only payment of the new minimum wage, but also: (a) placing posters in all workplaces in the City which give notice to employees of the current minimum wage and employees’ rights under the ordinance, and (b) including similar notice with the “first paycheck subject to [the] ordinance” to every employee covered by the new wage, which appears to also apply to any employer who has covered employees working in the City.

The Missouri legislature tried to block Ordinance 70078 when it was first passed in 2015, by enacting R.S.Mo. § 285.055, which prohibits political subdivisions from establishing a minimum wage exceeding the rate set by state statute.  The Missouri Supreme Court found R.S.Mo. § 285.055.2 was ineffective at voiding this particular St. Louis City ordinance, but did not invalidate the statute.  Given the legislature’s previous opposition to Ordinance 70078 as well as the disapproval of many businesses and interest groups, further legislative action (including a bill passed by the House and read in the Senate on March 9, 2017) and/or litigation to attempt to delay, halt, or eliminate Ordinance 70078 would not be surprising. 

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.  The choice of a lawyer is an important decision and should not be based solely on advertisements.

This update was prepared by Charles S. Elbert and Erin M. Leach.

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