On June 29, 2015, the Jefferson County Circuit Court upheld a recently passed Louisville-Jefferson County Metro ordinance increasing the minimum wage by 50 cents, from $7.25 per hour to $7.75, effective July 1, 2015. This is 50 cents more than current federal and state minimum wage. Unless the ordinance is overturned or stayed by the Kentucky Court of Appeals, employers must comply with this immediate increase and ultimately increase the minimum wage to $9.00 by July 1, 2017.

In the case before the Court, Kentucky Rest. Ass’n v. Louisville/Jefferson Cnty. Metro. Gov’t, Case No. 15-C1-754 (Jeff. Circ. Court, Div. 9), the plaintiffs Kentucky Restaurant Association (KRA) and other businesses challenged the law, arguing that it conflicts with the statewide minimum wage requirement of $7.25 under KRS 337.275(1). The relevant language of the local ordinance states:

Every Employer within the jurisdictional boundaries of Louisville Metro shall pay to each of its Employees wages at a rate of not less than $7.75 per hour beginning on July 1, 2015, $8.25 per hour beginning on July 1, 2016, and $9.00 per hour beginning on July 1, 2017.

In response to the KRA’s challenge to the Ordinance, the City of Louisville argued the state statute merely provides a “floor of wages” and local governments, particularly those enjoying complete home rule (See KRS 83.410), are authorized to increase the minimum wage in accordance with the economic conditions in their respective jurisdictions.

In her ruling yesterday, Jefferson Circuit Court Judge McDonald-Burkman agreed with the City of Louisville and upheld the ordinance. The Court reasoned that the ordinance did not conflict with KRS 337.275 or any other state law because it does not seek to set a minimum wage below $7.25. The Court also noted Louisville’s status as a first-class city with complete home rule and “broad authority to govern itself.”

Because the ordinance adopts the definition of “Employer” set forth in Kentucky’s wage and hour statute (KRS 337.010), the wage hike applies to all employers of any size, unless its employees are expressly exempt from the minimum wage requirement under state law.

Notably, the Ordinance does not appear to affect the Kentucky law requiring employers to pay tipped employees a minimum of $2.13/hour.

An employee who is paid less than the minimum wage may bring a civil action against his/her employer for unpaid wages, and the employer may be subject to a civil penalty not to exceed $100 per day per underpaid employee.

Update: On Tuesday, July 1, 2015, the Kentucky Court of Appeals denied a motion for an emergency injunction filed by the KRA to halt the minimum wage increase for hourly employees in Louisville. Thus, employers must comply with the provisions of the Ordinance unless and until directed otherwise by the Kentucky Supreme Court.