State Legislatures and Local Councils Jockey for Position in Fight Over Minimum Wage Laws

The 2016 state legislative sessions saw substantial increases in state and local activity surrounding the minimum wage. In some states, bills were introduced to restrict their localities’ ability to increase minimum wages on their own or otherwise impose local employer mandates. Despite this preemption legislation, some major localities passed landmark minimum wage regulations.

States and Cities Respond to Minimum Wage Discussion

Many Democratic lawmakers at the state and federal level have focused attention on raising the minimum wage. Both Hillary Clinton and Bernie Sanders made minimum wage increases a major part of their presidential campaign platforms and endorsed activist groups such as The Fight for $15. This national attention has helped bolster support for the movement at the state level. After a relatively inactive 2015, roughly 200 minimum wage bills and 12 ballot measures were introduced in different 40 states year. (For more information on state activity, including purposed ballot measures, see our previous coverage here; and for more information on the cyclical nature of minimum wage legislation, see our previous coverage here.)

Several populous states hiked minimum wages this year. Most notably, in April, California passed CA S.B. 3, which will increases the minimum wage from $10 to $15 per hour by 2022. Also in April, New York Governor Andrew Cuomo (D) signed NY S.B. 6406 as part of the state budget that will increase the minimum wage to $15 an hour by December 31, 2018 in “downstate” New York counties and New York City. In “upstate” New York counties the minimum wage will be gradually increased to $12.50 by 2021 (the minimum wage varies not only by geographic region but also employer size). More recently, the New Jersey legislature passed NJ S.B. 15, increasing the minimum wage from $8.38 to $15 by 2021. However, according to news reports, Gov. Chris Christie (R) will likely veto the bill.

In some states, however, public support for raising the minimum wage met strong Republican opposition, generating perhaps predictable conflicts between Republican-led state legislatures and Democrat-controlled cities. In March, the Alabama legislature passed AL H.B 174, which prohibits local governments from imposing minimum wage requirements on private employers. The legislation was a direct response to an ordinance passed by the Birmingham City Council in February, which would have increased the minimum wage to $10.10. The Alabama law effectively blocked the council’s attempt. (We reported on this battle in March.) More recently, Idaho has also adopted legislation prohibiting political subdivisions from raising the minimum wage above the state limit of $7.25. Below is an update on similar wage preemption bills from this legislative session.

A few state legislators went the opposite direction and introduced bills that specifically upheld a locality’s ability to pass own minimum wage regulations, such as NJ A.B. 2581 and NY A.B. 5835. In a different tactic, North Carolina introduced a resolution asking the general assembly to consider a bill allowing cities and counties to adopt local minimum wage regulations.

Cities Take Up the Fight for Wage Increase

In 2014, Seattle became the first major city to pass an ordinance increasing the local minimum wage to $15 per hour. A year later, San Francisco and Los Angeles joined suit and passed similar ordinances. Recently, several other major cities have taken steps to increase their minimum wage beyond the state-specified rate. On June 27, 2016, D.C. Mayor Bowser (D) signed a law that will gradually increase the district's minimum wage until it hits $15 per hour in 2020. Following these actions, the neighboring Maryland suburb of Montgomery County also introduced a local ordinance supporting a $15 minimum wage. The bill replaces similar local legislation that went into effect in 2014 that will raise the Montgomery County minimum wage by annual increases to $11.50 by 2017. Both pieces of legislation exceed the state rate outlined in the Maryland Minimum Wage Act of 2014, which calls for the minimum wage to ultimately be raised to $10.10 per hour by July of 2018. In April, the Baltimore City Council also introduced a $15 minimum wage proposal. So far, the state legislature has not shown any interest in stopping either pieces of local legislation in Maryland.

In Cleveland, local unions and grassroots organizations gathered enough support to compel the city council to introduce legislation for a $15 per hour minimum wage. In contrast to proposals in other cities, which provide for gradual increase over a 5 to 7 year period, the Cleveland proposal would impose the $15 requirement on any business with more than 25 employees beginning in January 2017. As a result, many in Cleveland’s business community are staunchly opposed to the bill. However, it seems business owners might not have to worry about the proposal this year. According to news reports, the wage proposal will likely not appear on the November ballot because of city deadlines for ballot proposals. If the proposal has to wait until next year, it will be interesting to see how Governor Kaisch (R) and other Ohio lawmakers respond, as Ohio did not introduce any preemption legislation this session.

In states with preemption laws already in place, some city councils have defiantly voted to raise the minimum wage. Earlier this month, Miami Beach’s City Commission unanimously voted to create a minimum wage law. Miami Beach is the first Florida city to set a local minimum rate higher than the state rate of $8.05. The new local legislation will increase wages to $13.31 by 2021 and is direct challenge to the state’s preemption law. According to the Miami Herald, "Miami Beach’s legal department is arguing that the state’s preemption is unconstitutional because of an amendment to Florida’s constitution passed by 71 percent of voters in 2004 that . . . seems to leave the door open for local governments to create their own wage laws."

Even in states that have already raised the minimum wage, localities are still pushing for faster increases. For example, in California, Santa Clara County began exploring the possibility of increasing the county wide minimum wage to $15 by 2019, almost one year before Governor Brown (R) approved increasing California's minimum wage to $15 by 2022. Initially, there were concerns that local advocates would abandon previous efforts after the state legislation passed. However, representatives from the county’s Cities Associations endorsed a regional $15 wage by 2019 at the June 10th meeting. The next step would be for the county council to formally introduce a bill.

Minimum wage will no doubt continue to be a contentious issue in the coming months. Now that many states have adjourned for the year, the focus for many advocacy groups will most likely turn even more to localities. In 2016, wage hike campaigns have experienced unprecedented success in the D.C. Metro Area as well as in major cities like New York and Miami Beach. Specially, the outcome of the Miami Beach ordinance may determine whether activist groups choose to expand their local campaigns to more Republican states with restrictive local wage laws.