The Missouri Supreme Court has overturned a lower court’s ruling that St. Louis’ minimum wage ordinance is invalid, finding that the ordinance is not preempted by the state law.
St. Louis City’s Ordinance 70078 (“the Ordinance”) provides for a series of increases to the minimum wage for employees working within the boundaries of St. Louis. The plaintiffs argued that Ordinance 70078 was preempted by the state minimum wage law. The plaintiffs contended that state law affirmatively authorized employers to pay as little as $7.65 per hour, the state minimum wage rate.
A trial court accepted the plaintiffs’ argument and, in October 2015, held that the Ordinance was invalid.
The Missouri Supreme Court reversed the trial court’s ruling and rejected the plaintiffs’ argument. Because the state minimum wage law merely prohibits employers from paying employees a wage lower than the state minimum, local ordinances imposing higher minimum wages did not conflict with the state statute.
Furthermore, Missouri’s minimum wage law did not “occupy the field” of minimum wage laws. In fact, the Missouri Supreme Court noted that the state legislature had recognized and authorized local ordinances addressing minimum wages.
Notably, both the trial court and the Missouri Supreme Court rejected the plaintiffs’ argument based on Section 67.1571 of the Missouri Statutes, which prohibits “political subdivisions of this state from establishing or requiring a minimum wage that exceeds the state minimum wage.” The courts agreed that the Missouri Constitution prohibits bills containing more than one subject, and Section 67.1571 violated this requirement because its primary purpose was to establish community improvement districts.
Under the phase-in schedule in the Ordinance, the minimum wage in St. Louis was set to rise to $10.00 per hour on January 1, 2017 and $11.00 per hour on January 1, 2018, after which the minimum wage will be increased annually to reflect the rate of inflation.
St. Louis city officials issued a statement explaining that businesses will be provided “a reasonable grace period to adjust to the new minimum wage rate,” but will be subject to revocation of their business licenses if they do not comply with the Ordinance.