Business owners in Lexington can return their minimum wage pay scales to pre-July levels, if they so choose, now that the Kentucky Supreme Court has overturned the city’s minimum wage ordinance passed in November 2015 and enacted this past summer.
The 6-1 decision by the state’s high court came in a challenge filed in Louisville over that city’s passage of a minimum wage increase. Lexington followed months later with its own version of a higher minimum wage.
The ruling said, in effect, that both Louisville Metro Council and Lexington Urban County Council exceeded their authority because state law does not contain room for such local legislation. Lexington had sought to raise the minimum wage to $10.10 an hour over three years. The first wage increase in the city began July 1, raising minimum pay from $7.25 an hour to $8.20.
“I am disappointed,” said Jennifer Mossotti, Lexington’s 9th District council member who championed the wage increase last year. “I am concerned that those who needed the help the most weren’t able to receive the increase that would have helped with the basic necessities like rent, groceries, gasoline, all that. They have lost in this effort.”
Lexington Mayor Jim Gray supported the local ordinance last year saying “because, on balance, it is the right thing to do.” But his office had no comment on the court’s decision. His spokeswoman, Susan Straub, said only, “Lexington’s local minimum wage ordinance has been invalidated."
She said any complaints about wage issues may be handled by the city’s Human Rights Commission.
Louisville Mayor Greg Fischer said the Supreme Court was wrong to strike down the city’s minimum wage law.
“Seven dollars and twenty-five cents, the old minimum wage, means you’re making $15,000 a year,” said Fischer. “So, for the folks in Frankfort, I want to ask if you could live on $15,000 a year.”
Mossotti said she and other supporters understood that the Lexington wage ordinance they helped pass could be short-lived.
“We always knew going into it that there might be the possibility because Louisville was already in the litigation,” she said.
The reason supporters went ahead with the ordinance anyway were precedents they thought would support their action.
“We had passed the public smoking ban and the fairness ordinance, which were adopted by the Lexington council but not in effect in all counties of the state,” Mossotti said. “That’s what we were looking at as precedents for the minimum wage ordinance.”
But the high court opinion, written by Justice Bill Cunningham, seemed to disagree with that premise.
“What [state] statute makes legal, the ordinance makes illegal and, thus, prohibits what the statute expressly permits. Therefore, the ordinance is invalid unless additional statutory authority permits municipalities to raise the minimum wage,” he concluded.
The councils in Lexington and Louisville acted, in part, because Kentucky and federal lawmakers had not passed a higher minimum wage law in years. The Kentucky House passed a bill to raise the minimum wage statewide but the Kentucky Senate did not act on it.
The ruling does not mean that business operators in the city must return to the old federal $7.25 minimum wage. If businesses want to maintain the higher pay scale: “It’s their decision,” said Straub.
Some Lexington businesses say they will keep the higher pay scale that was enacted last summer. Broomwagon, a Lexington bike shop, coffeehouse, beer garden and café located on North Limestone, is keeping it.
“We think it was a pretty big bummer that the state would undo all the hard work people have done to make things more fair,” co-owner Adam Drye told Business Lexington. “Payroll is a huge chunk of expenses, but it’s more important to recognize that labor is the most valuable resource of any business.”
The business’s Facebook page carried a posting about the wage issue that read: “Broomwagon Coffee + Bikes will stick to Lexington’s plan, as laid out, on our own. Hopefully, along with many other Lexington, Louisville and other Kentucky businesses, they will commit to a fair wage for workers than what federal and state governments can accomplish.”
Drye added: “We only have so many hours on this planet and to compensate your workers’ time with the current required minimum wage is a disservice to them and to their potential.”
Lexington council member at-large Kevin Stinnett did not support the minimum wage increase when the vote was taken last year. At a recent council work session he agreed that the city needed to attack poverty in the city but said everyone needs to look at “the big picture.”
“The war on poverty is still real, and those of us who didn’t support a local mandate on minimum wage last year but supported state and federal mandates, are still chugging along on this,” Stinnett told the mayor and council. “This council supported and voted for a workforce development coordinator.”
Stinnett says he supports more workforce- ready training in local schools. He said local employers are “starving” for trained workers. The city has developed new initiatives to help. “Nothing was really lost on this [court ruling], but we still need to fight poverty.”
During a recent council hearing Stinnett suggested removing the ordinance from the books but was met with resistance.
Vice Mayor Steve Kay said the ordinance should be left for now “as an indication of what this community decided to do and as a way to continue the conversation about the need at the state level to increase the minimum wage.”
Gray seemed to agree.
“We did the right thing at that time, and this is the right thing to do today and to continue to advocate for an increase in the minimum wage,” he said.