As with the recent uptick in state and municipal paid leave laws, employers in multiple jurisdictions now find themselves faced with a similar national bandwagon in favor of increased state and municipal minimum wage requirements, highlighted by the Los Angeles City Council’s recent decision to ratify a proposal moving that City’s minimum wage to $15 per hour by 2020. Los Angeles joins other west coast municipalities, including Seattle and San Francisco, in drastically increasing the minimum wage.
Courts will continue to wrestle with the appropriateness of state and municipal legislation in this area, as exemplified by the tortured history of New York Local Law 27, a City prevailing wage ordinance for the building services sector. Passed by the City Council during the Bloomberg administration, Mayor Bloomberg successfully sued to invalidate the law, citing longstanding New York precedent that the state-wide Labor Law preempts any effort to create patchwork municipal legislation on wage issues. Mayor of the City of N.Y. v Council of the City of N.Y., 2013 N.Y. Misc. LEXIS 3445 (N.Y. Sup. Ct. Aug. 2, 2013). Upon taking office, Mayor de Blasio reversed the Mayoral Office’s position on the issue, and jointly moved with the City Council that the opinion striking down the Law be withdrawn.
Legal confusion regarding the applicability of a law – any law – requiring payment of a specific wage clearly wreaks havoc with businesses, in particular businesses operating in numerous jurisdictions and also small business owners. Consider the possibility of a drastic increase to the minimum wage for New York City and the surrounding counties, as has been proposed, and the potential for migration of small businesses employing such workers from the outer boroughs into upstate New York or New Jersey simply to avoid a drastic increase in labor costs. These changes affect not only those businesses, but the consumers of their services, as with the increase to New York State’s tip credit minimum wage, effective at the end of the year which likely will result in an increase to the at times already startling cost of dining in New York State and particular New York City.
Watch this space for coverage of minimum wage developments. Increased ambiguity and confusion, as always, continues to serve as a breeding ground for litigation.