A divided Minnesota Court of Appeals has affirmed Minneapolis’ minimum wage ordinance.
In 2017, the city passed the ordinance calling for a phased-in $15 an hour minimum wage. Companies with under 100 employees get seven years to bring their employees up to the standard. As of Jan. 1, 2019, the minimum wage of $9.86 per hour is mandated for large employers and $8.04 per hour for small employers.
The Graco Company sued, saying the Minneapolis ordinance is pre-empted by the Minnesota Fair Labor Standards Act, which requires a lower minimum wage than Minneapolis’ rule.
In upholding a district court ruling, the Court of Appeals ruled Monday that the state law doesn’t prevent a city from requiring a higher minimum wage. It only prohibits paying less.
The state law “does not expressly permit employers to pay the state minimum wage, nor does it expressly free an employer from local minimum-wage regulation,” Judge Renee Worke wrote.
Graco also argued that minimum wage is a state, not a city, concern.
“Although the legislature has indeed amended the state minimum-wage formulas nine times and set forth procedures by which to calculate future rates, we are not persuaded that this constitutes the type of all-encompassing regulations that Minnesota appellate courts have found to preempt local regulations,” Worke wrote.
Graco ignores significant record evidence of the beneficial effects of the Ordinance for those who work in the city and their families.
The record includes studies, data, and public input as well as a review of minimum-wage ordinances in other jurisdictions undertaken prior to enactment of the Ordinance.
Input from Minneapolis workers regarding their difficulties supporting themselves and their families, especially with the high cost of living in Minneapolis, together with RWC modeling on the effect of minimum wage laws on income and food security, support the district court’s determination that the Ordinance will not have an unreasonably adverse effect on the general populace.
In a dissent from the three-judge panel, however, Judge Matthew Johnson said a municipal ordinance cannot “forbid what the statute expressly permits.”
In this case, the City’s minimum-wage ordinance forbids a large employer from paying an hourly wage of between $9.86 and $11.24, while the state minimum-wage statute expressly permits a large employer to pay an hourly wage of between $9.86 and $11.24.
Thus, the City’s minimum-wage ordinance forbids what the state statute expressly permits.
Therefore, the City’s minimum-wage ordinance conflicts with, and thus is preempted by, the state minimum-wage statute.
Johnson acknowledged that the state minimum wage rate is higher than the federal government’s minimum wage law, but he said the relationship between the federal government and state is different than the one between a state and a municipality.
And besides, he said, the federal law expressly allows states to mandate a higher minimum wage while the state law does not.
The case will almost certainly have to be settled by the Minnesota Supreme Court.
“Our minimum wage ordinance is here to stay,” Minneapolis Mayor Jacob Frey said in a press release. “Thousands of Minneapolis workers and families can rest a little easier knowing that the ordinance protecting their livelihoods is on firm legal ground.”