Local governments in Missouri may adopt higher minimum wage

By Ronald Miller, J.D.– In an en banc decision, the Missouri Supreme Court ruled that Missouri’s minimum wage law did not occupy the field of minimum wage laws, nor did it prohibit the adoption of local minimum wage ordinances.

Rather, the state law was found to set a floor below which an employee could not be paid. Additionally, the state high court determined that adoption of the ordinance did not exceed a city’s charter authority. In so ruling, the high court found no validity to an employer’s challenge to a minimum wage ordinance enacted by the City of St. Louis. Judge Fischer filed a separate opinion concurring in the result (Cooperative Home Care, Inc. v. City of St Louis, Missouri, February 28, 2017, Stith, L.).

Minimum wage ordinance. On August 28, 2015, St. Louis enacted Ordinance 70078 of its city code. The ordinance provides a series of four graduated increases to the minimum wage for employees working within the physical boundaries of St. Louis, beginning on October 15, 2015, at $8.25 per hour and ending on January 1, 2018, at $11 per hour. Beginning January 1, 2021, the minimum wage rate under the ordinance will increase annually on a percentage basis to reflect the rate of inflation. On September 14, 2015, an employer filed a petition seeking a declaratory judgment that Ordinance 70078 was invalid and injunctive relief to prevent enforcement of the ordinance. The employer alleged that local minimum wage ordinances were preempted by Missouri’s minimum wage law, and that the ordinance exceeded the charter authority of the city.

Section 290.502 contains Missouri’s minimum wage law. In 1998, an amendment to the minimum wage law was adopted and is codified at Section 67.1571. That provision provides that “No municipality … shall establish, mandate or otherwise require a minimum wage that exceeds the state minimum wage.”

As an initial matter, the trial court found that Section 67.1571 was invalid because it violated the single subject rule set out in article III, section 23 of the Missouri Constitution. It also found that Ordinance 70078 was expressly limited to local concerns and did not extend to matters of statewide or nationwide concern. Nonetheless, the trial court invalidated the ordinance as beyond the city’s authority, finding that it was preempted by sections 290.502 and 71.010. The trial court concluded that section 71.010 prohibited the adoption of local ordinances supplementing any state law on a subject, including minimum wage ordinances.

Thereafter, the legislature passed a new measure that prohibited municipalities from providing a minimum wage that exceeded the federal or state minimum wage rate. That measure went into effect on October 16, 2015. Arguing that the legislation contained “grandfathering” language, the city filed a motion to amend or modify its judgment. The trial court overruled the motion. This appeal followed.

Charter city. As a constitutional charter city, St. Louis had all powers that the general assembly of the state of Missouri has authority to confer upon any city, provided such powers are consistent with the constitution of the state. Pursuant to this constitutional provision, if a charter city’s power to adopt an ordinance is challenged, the court will uphold the ordinance upon finding: (1) the ordinance is not preempted by statute, and (2) the locality acted within the constitutional parameters of the authority delegated to it in its charter. Here, the employer claimed that state statutes preempted the ordinance and that the city acted beyond its charter authority.

Constitution’s single subject rule. As an initial matter, the Missouri Supreme Court agreed with the trial court’s ruling, and the position of the city, that the enactment of section 67.1571 as an amendment on an unrelated bill violated the Missouri Constitution’s single subject rule. Finding that the original purpose of HB 1636 was to establish community improvement districts, and that this controlling purpose was independent of the minimum wage amendment, the high court concluded that Section 67.1571 may be severed from the unchallenged portions of the bill.

Preemption of field of minimum wage regulation. Next, the court turned to consider whether the ordinance conflicted with Missouri’s minimum wage law. Here, the employer argued that the entire field of minimum wage regulation was preempted by the state minimum wage law. Specifically, it contended that the law authorized employers to pay to an employee any wage at or above the statutory minimum, and an ordinance providing for a higher minimum wage “prohibits what the state permits” in that it prohibits employers from paying a wage lower than the local minimum wage standard but higher than the state standard.

The high court rejected this argument. Rather, it pointed out that conflict preemption applies only when a local law prohibits what state law permits or when the local law permits what state law prohibits. There is no conflict preemption when a local law simply supplements state law, such as when the locality prohibits more than the state prohibits. Thus, the employer was incorrect that the Missouri minimum wage law was an affirmative authorization to pay no more than the state minimum wage. It simply sets a floor below which an employee cannot be paid. Because the ordinance simply supplemented the state law by setting additional local limits on the minimum amount an employer can pay an employee, it was not in conflict with the state law.

Further, enactment of the ordinance did not exceed the city’s charter authority, ruled the Missouri Supreme Court.

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