Two Year Battle Over Minimum Wage Pauses
In 2015 when the St. Louis Minimum Wage Ordinance was passed, it was soon to become part of a larger controversy.
At the same time as the ordinance, state leaders passed a preemptive minimum wage and sick leave law, prohibiting local governments from passing local employment laws.
However, the one caveat in the law allowed for any existing ordinances that were in effect as of August 28, 2015, to remain in effect.
St. Louis officials made sure that the new ordinance started on August 28, 2015.
Yet the city was soon in the middle of a legal debate about the legality of its minimum wage ordinance. Business groups took the ordinance to the lower courts and won in 2015.
The trial court found that the minimum wage ordinance was not legal on several grounds and the law was halted.
But in 2017, when the battle made its way to the Supreme Court, the higher court had a different opinion and ruled that the minimum wage law was actually legal. It ruled that parts of a 1998 state law forbidding minimum wage hikes locally was actually illegal.
With the ruling, St. Louis’ minimum ordinance became immediately effective. The city provided a grace period for businesses to comply.
The new enforcement date for minimum wage was May 5, 2017. Minimum wage went from the State’s wage of $7.70 to $10 overnight.
Overview of the City’s Minimum Wage Ordinance and Schedule
The new ordinance applies to employees working within the geographical boundaries of St. Louis.
Employees Included and Excluded from the Ordinance.
The law covers all employees who work at least 20 or more hours a year in St. Louis, including temporary, part time, and contracted employees.
There are a few exceptions to the minimum wage ordinance including volunteers of non profiits, employees of day or summer camps employed less than 4 months a year, casual babysitters, offenders who are working while incarrarated, work study employees, and in loco parentis individuals paid to foster children.
Additionally, small businesses whose annual sales are below $500,000 a year and employers with less than 15 employees of any type are exempt from the new law. Government employees are also exempt from the ordinance.
- Volunteers for non profits, charitable organizations, and religious organizations
- Summer or day camp employees who work less than 4 months a year
- Casual babysitters
- Incarcarrated individualls working in a correctional facility
- Work Study employees
- Individual employed as “in loco parentis” to foster children
- Government employees
- Small businesses: annual sales below $500,000 or less than 15 employees during the year.
Minimum Wage Increase Schedule
St. Louis’ minimum wage schedule is set to increase to $11.00 in 2019 and annually afterwards.
|Minimum Wage||Effective Date|
|$7.70||Current Rate before Supreme Court Ruling|
|$10.00||May 5, 2017|
|$11.00||January 1, 2019|
|Based on the Consumer Price Index||January 1, 2020|
Tipped Employees also see their minimum wage increase. If the employee makes at least $30 in tips per month Minimum wage is 50% of the regular minimum wage.
Penalties, Notifications, and Fines
Companies who do not comply with the City’s minimum wage can be penalized for each day of non-compliance after May 5th.
The Department of Human Services and the City Counilors Office oversee compliance with the ordinance.
Employers are required to post notice of the new minimum wage in a conspicious place in the workplace.
Punishment for violations include jail time of up to 90 days in jail and a fine of up to $500.00 per violation. Each day is considered a new violation, which can add up to a lot of fines quickly.
Additionally, the employer may be required to compensate the employee including restitution pay plus interest.
Businesses who fail to comply with the ordinance can have their business licenses revocted
Lastly, employees are authorized to bring civil suits against employers for non-compliance.
St. Louis Minimum Wage Ordinance has Uncertain Future
Even as employers have jumped to become compliant with the new minimum wage, the future of the wage remains uncertain.
The Missouri House and Senate have currently passed a bill, HB 1194, which servces to further clarify state preemption law and unlike the 2015 bill, it does not include an exclusion that would allow St. Louis to continue their minimum wage ordinance.
In addition, the new bill has an emergency clause that makes the law immediate once the Governor signs the bill. The bill is currently sitting on the Governers desk for a signature.
If the governor signs the bill, and it is expected that he will, the St. Louis ordinance becomes immediately void.
Missouri State Lawmakers Seek a Business Friendly Environment
One of the biggest reasons for the preemptive law cited by lawmakers is to avoid a patchwork of employment laws across the state and to stop certain cities from becoming uncompetitive.
St. Louis’ minimum wage is $2.30 over the minimum wage for employers just outside city limits and throughout the county. This could cause employers to move to the county and could discourage new employers from moving to St. Louis.
The administrative and labor costs of changing hourly wages can become steep to employers. In fact, one study on the impact of an $11 Minimum Wage in St. Louis found that the increased minimum wage is likely to cost the over 1,000 minimum wage jobs.
Those who will feel the greatest effect of the job loss will be employees with lower skills such as having no or only a high school education. Employees ages 16-19 are estimated to be 50% of the employees affected. Further, it is likely to affect 61% of women.
This can be seen in San Francisco, where the minimum wage has increased faster than any other city in the USA. San Francisco has seen a decrease in minimum wage jobs with 35% of retail and hospitality employers reducing jobs due to increased employment laws.
Businesses Uncertain over Employment Laws
Businesses in St. Louis may see continued swinging between state and local employment laws through 2017.
Additionally, employers in Kansas City are also in the middle of multiple conflicting employment law debates and legal conflict.
Let SwipeClock Help
Fortunately, SwipeClock provides a comprehensive array of workforce management and time tracking tools that can help businesses to more easily stay in compliance with local and national laws.
Records are effortlessly kept for years and accrual is automatically tracked and reported to employees according to the state and city laws. Additionally, with geo-timekeeping clocks, businesses can effortlessly track time employees work in specific cities to ensure compliance while maintaining the bottom line, a key component in rising labor costs.
Written by Annemaria Duran. Last updated May 17, 2017