On February 28, 2017, the Missouri Supreme Court issued its long-awaited opinion in Cooperative Home Care, Inc., et al. v. City of St. Louis, Missouri, et al., ruling that the City of St. Louis can proceed with a citywide local minimum wage increase under Ordinance 70078 of its revised city code (the “Ordinance”). The Ordinance provides a series of four graduated increases to the minimum wage for employers with employees working within the physical boundaries of the City of St. Louis.

Background

The Ordinance was enacted by the Board of Aldermen of the City of St. Louis on August 28, 2015.  The Ordinance provides a series of four graduated increases to the minimum wage for employees working within the physical boundaries of St. Louis, which were to be phased in beginning on October 15, 2015 at $8.25 per hour and rising to $11 per hour on January 1, 2018.  In addition, beginning January 1, 2021, the minimum wage rate in St. Louis will increase annually on a percentage basis to reflect the rate of inflation.  The Ordinance further provides: 

“If the state or federal minimum wage rate is at any time greater than the minimum wage rate established by this ordinance, then the greater shall become the minimum wage rate for purposes of this ordinance.”  

Shortly after the Ordinance was enacted, business groups in St. Louis filed a Petition seeking (1) a declaratory judgment that the Ordinance was invalid; and (2) injunctive relief to prevent enforcement of the Ordinance.  The business groups alleged that local minimum wage ordinances are preempted by Sections 290.502 and 67.1571 of the Revised Statutes of Missouri (R.S.Mo.) and that the Ordinance exceeds the charter authority granted to the city of St. Louis.  

Based on principles governing preemption and the Missouri Constitution’s single subject rule, the Court held that state law does not preempt the Ordinance and that the Ordinance is not beyond St. Louis’s charter authority.

Looking Forward

As set forth above, the minimum wage in St. Louis was scheduled to rise over the course of three years beginning on October 15, 2015.  Under the Ordinance, the minimum wage in St. Louis was scheduled to increase to $10.00 as of January 1, 2017.  While the Ordinance is effective as of the date of the Court’s ruling, Mayor Francis Slay has said he will give businesses a “reasonable grace period” to adjust to the new minimum wage.  Mayor Slay did not specify how long the grace period will last, and the City has not established a new phase-in schedule. Mayor Slay’s director of communications has stated that enforcement of the Ordinance will be complaint-driven.  The City plans to post a complaint form online for employees to alert city officials about employers who are not in compliance with the Ordinance.  Employers who do not comply with the new minimum wage are subject to prosecution in Municipal Court and could have their business license or occupancy permit revoked, in addition to the award to an employee of back wages plus interest from the date of non-payment or underpayment.  Each day that an employer pays an employee a wage below the minimum wage counts as a separate violation.