NFIB Disappointed With St. Louis Minimum Wage Decision

Date: March 06, 2017

Last week the Missouri Supreme Court ruled against NFIB in a lawsuit challenging a St. Louis ordinance, which raises the city’s minimum wage from $7.70/hour to $11/hour by 2018. In Cooperative Homecare Inc., et al. v. City of St. Louis, NFIB argued that Missouri state law preempts localities from having a minimum wage that is higher than the wage set by the state or federal governments.

The Supreme Court found that legislation preempting the minimum wage increase was unconstitutional because it violates the Hammerschmidt rule from a 1994 Missouri Supreme Court decision. Simply put, the Hammerschmidt rule holds that, under the Missouri constitution, legislation must be focused on only one subject. And in this case, the legislation at issue primarily concerned community improvement districts.

The Court also disagreed with NFIB’s argument that the Missouri minimum wage law preempts local minimum wage ordinances. Instead, the Court characterized the new wage as setting “a floor below which an employee cannot be paid.” In other words, the Court concluded that municipalities can—at least within the existing legal landscape—impose heightened minimum wage obligations on top of the statewide minimum wage.

It goes without saying that NFIB is disappointed by the Supreme Court’s decision. Our members still believe that the minimum wage should be consistent throughout the state and that allowing local governments to set their own higher wages will create unnecessary hardships for many small businesses. And for that matter, NFIB will press for legislative solutions to limit or cabin municipal powers going forward.

If you allow one city or county to mandate higher wages, you’re putting businesses in that locality at a real competitive disadvantage as compared with businesses in nearby communities where the cost of doing business–and the cost of goods and services–is that much lower. As we’ve explained elsewhere, this results in serious economic dislocation, and is problematic for the overall business climate within the state.

In the interim, NFIB/MO will be working aggressively this legislative session to narrow the impact of this ruling.

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