On February 28, 2017, the Missouri Supreme Court issued an opinion upholding the minimum wage increase enacted by St. Louis City back in 2015 under Ordinance No. 70078.  The ordinance applies to all employers: (i) which have annual gross revenues of at least $500,000 (or for new businesses that have not been in operation for a full year, those that have projected revenues of at least this much); and (ii) employ more than 15 employees (whether full time, part time, temporary, and including any employees working on a contingent and contracted basis through a temp agency).  Employee is defined as any individual who performed at least 20 hours of work within a calendar year for an employer while physically present within the geographical boundaries of the City of St. Louis.

Under the ordinance, employers must begin paying their employees at least $10/hour (presumably effective immediately).  The minimum wage rate goes up to $11/hour effective January 1, 2018 and has annual increases to correspond to the rate of inflation.  So, the minimum wage will continue to rise each year in the City.  For employees who are compensated with more than $30 per month in tips, employers may pay them at a rate of 50% of the new minimum wage (so, $5/hour currently), provided that the total compensation (wages plus tips) equals at least the full new minimum wage.  Employers have an obligation to provide evidence of tips received by employees.

In addition, the ordinance prohibits employers from interfering with or retaliating against an employee’s exercise of their rights under the ordinance.  Like the FLSA, employers cannot contract with their employees to pay them less than the minimum wage and agreements that violate the ordinance are invalid.

Each day that an employer fails to pay the minimum wage constitutes a separate violation.  Violations of the ordinance are punishable by up to 90 days jail time and/or a fine of up to $500 per violation (remember, each day is a separate violation) and an order of restitution to compensate the employee for the pay he/she is entitled to.  Permits and licenses issued by the City can also be revoked for violation of the ordinance.  Although the statute itself doesn’t specifically provide a private cause of action to employees, employees retain their rights under common law and statute to bring a civil action against employers (which means that employees CAN sue employers for underpayment of wages—and those actions usually provide for recovery of attorneys’ fees by the employee).

Employers must also post a notice in each facility located within the City limits that advises employees of their rights under the ordinance.  The notice has to include the specific text of certain sections of the ordinance.  Employers must also include a similar notice with an employee’s first paycheck after the ordinance goes into effect.  Form notices can be obtained from the Department of Human Services at the City, though the form notices are not yet posted on the Department’s website.

For more information you can contact Attorney Theresa A. Phelps.