On Aug. 28, 2015, Mayor of St. Louis Francis Slay and the Board of Aldermen passed an aggressive wage and hour ordinance that gradually increases the minimum wage in the City of St. Louis, Missouri to $11.00 by Jan. 1, 2018. Presently, the minimum hourly wage in Missouri is $7.65, which is forty cents more than the minimum an employee must be paid under federal law. Beginning Oct. 15, 2015, the minimum wage in the City of St. Louis will increase according to the following schedule:
|Effective Date||Covered Employees|
|Oct. 15, 2015||$8.25|
|Jan. 1, 2016||$9.00|
|Jan. 1, 2017||$10.00|
|Jan. 1, 2018||$11.00|
Beginning on Jan. 1, 2019, and every Jan. 1 thereafter, the minimum wage will increase at the rate of inflation, as determined by the Ways and Means Committee of the Board of Alderman.
Covered Employers and Employees
The ordinance affects nearly every employer that maintains a business facility or operates within the city with more than fifteen (15) employees (regardless of their status).
Most city employees are covered under the ordinance, as it applies to all employees who work at least twenty (20) hours within the calendar year while physically present within the geographic boundaries of the city. This includes all employees working on part-time, full-time, or temporary basis. It also includes contingent and contracted workers, individuals working through a temporary service, and those employed through a staffing or employment agency.
The ordinance includes a number of exemptions for certain employers. For instance, governmental entities other than the City of St. Louis (units of local, state, or federal government) are not covered employers. Additionally, the ordinance excludes various entities whose annual gross revenues made or business done is less than $500,000. It also excludes entities that employed less than fifteen (15) employees during each calendar week within both the current and previous calendar year. In calculating the number of employees for this exemption, all employees are included in the calculation, including all part-time employees, full-time employees, temporary, contingent and contracted workers, individuals working through a temporary service, staffing or employment agency, and exempt employees under the ordinance.
Posting, Notification, and Record Keeping
By Oct. 15, 2015, employers must post a notice informing employees of the current minimum wage and their rights under the ordinance. Notices must be posted in a conspicuous place at every business facility in the city.. Employers without a business facility within the geographic limits of the city and households that serve as the worksite for domestic workers are exempt from the ordinance’s posting requirement.
Employers must also provide the notice with each covered employee’s first paycheck after the annual wage increases go into effect. Consequently, employers must provide these notices every year. Employers must also provide the notice with the first paycheck of new employees who are hired after the minimum wage increase went into effect.
In addition, as required by the Missouri Minimum Wage Law, employers must maintain records of all wages paid to employees for a minimum of three years.
City Fines and Penalties
Employers may be fined $500 per violation of the ordinance or up to ninety (90) days in jail, or any combination thereof. Employers may also face license suspension or revocation and orders to pay restitution to underpaid employees (in the form of unpaid back wages plus interest). Each day that a violation continues constitutes a separate and distinct violation.
Practical Impact of the Ordinance
As a result of the new law, labor costs will increase for many city employers.—which must now account for annual minimum wage increases starting on Oct. 15, 2015.
Shortly after the ordinance was passed, the Missouri Chamber of Commerce, the Missouri Restaurant and Retailers Associations and several other groups filed a lawsuit in St. Louis Circuit Court to prevent the city from increasing its minimum wage. Specifically, the lawsuit claims that raising the minimum wage conflicts with the Missouri Constitution and would cause “immediate and irreparable harm” by forcing employers to comply with different rules in different municipalities. A hearing in this lawsuit is scheduled on Oct. 6, 2015. We anticipate a ruling on whether the city’s ordinance takes effect as planned by Oct.15, 2015.
Given the increased labor costs, the fines made available by the ordinance, and the possibility of jail time, employers should ensure that they comply with the ordinance, including its new posting and notification requirements. If you have any questions about the ordinance or need assistance drafting appropriate notices, feel free to contact Chris Sanders or Jamie M. Westbrook.