In the 2024 election, Missouri voters approved Proposition A, a measure that raises the minimum wage beginning January 1, 2025, and introduces mandatory earned paid sick leave for most workers effective May 1, 2025.

Key Provisions of Proposition A

• Applicability: Proposition A applies to most private employers and applies to most employees including full and part-time with limited exceptions.
• Minimum Wage Increase: Proposition A establishes a gradual increase in Missouri’s minimum wage over the next two years. Starting January 1, 2025, employers must pay Missouri employees a minimum wage of $13.75 per hour. The minimum wage increases to $15.00 per hour on January 1, 2026. Beginning January 1, 2027, the minimum wage will either increase or decrease year after year based on the cost of living.
• Earned Paid Sick Leave: The law mandates that employers provide paid sick leave, allowing employees to take time off for conditions such as personal illness or care of a family member with an illness. Employers can either front-load sick leave, providing employees with their full annual leave at the start of the year or use an accrual system where leave is earned over time. The amount of accrual depends on the number of employees. For example, an employer with fifteen or more employees must provide a minimum accrual of one hour of earned paid sick time for every thirty hours worked. Full-time employees who are exempt from overtime under the Fair Labor Standards Act are assumed to work 40 hours in a work week for accrual calculations—these employees are expected to accrue approximately 70 hours of earned paid sick time per year.
• Carryover: Employees can carry over up to 80 hours of unused, earned sick leave into the following year. However, an employer does not have to permit an employee to use more than the entitled number of sick time hours available under the statute. For employers with fifteen or more employees, employees are not entitled to use more than 56 hours of earned paid sick time per year, unless the employer selects a higher amount.
• PTO Policies: In lieu of implementing a second policy, an employer who already has a paid time off policy can modify their existing policy to comply with Proposition A’s requirements. If the paid leave policy meets the accrual requirements and can be used for the same conditions as earned paid sick time, additional earned paid sick time is not required.
• Payout: Employers are not required to pay out unused sick leave at the end of the year but may choose to do so as part of their policy instead of allowing carryover. Notably, an employer does not have to pay an employee unused earned paid sick time at termination or separation from employment.

Impact on Employers

• Adjustments Required: Employers must comply with the new minimum wage requirements and set up systems to manage paid sick leave. They can opt for front-loading or an accrual method. Employers opting to adjust their paid leave policy to encompass earned paid sick time may do so if their policy complies with Proposition A’s accrual and use requirements.
• Flexibility: While the wage increases and paid sick leave mandate may increase costs, employers have some flexibility in managing sick leave through carryover limits, payouts, use limits, and discretion to loan sick time in advance.

Proposition A introduces significant changes for Missouri minimum wage and paid sick leave.