The Missouri legislature passed a bill earlier this year prohibiting cities and local municipalities from establishing minimum wage rates that differ from the state’s established minimum wage rate. The bill was sent to Governor Eric Greitens for his approval, and the Governor recently announced that he will allow the bill to become law without his signature. Effective August 28, 2017, the minimum wage rate in St. Louis City will revert back to the state rate (which is currently $7.70/hour). The current minimum wage rate in St. Louis City is $10/hour (scheduled to increase to $11/hour on January 1, 2018), after the Missouri Supreme Court upheld a St. Louis City ordinance establishing a substantial City-wide minimum wage increase. The City of Kansas City enacted a similar ordinance that was subsequently challenged in the courts and that legal challenge was still pending at the time of Greitens’ recent announcement.
Given the newly enacted law, effective August 28, 2017, employers in St. Louis City will no longer be forced to pay their employees at the higher $10/hour minimum wage rate. However, from a practical standpoint, it will be difficult for employers to substantially reduce current employees’ wage rates without the risk of negatively affecting employee morale. Employers will need to think creatively in addressing this difficult situation created by the legislature’s failure to enact this new bill before the City’s minimum wage increase went into effect. Governor Greitens was particularly frustrated with the delay in the legislature’s passage of this bill.
For more information you can contact Attorney Theresa A. Phelps.