UPDATED: An newer post on this topic is available here.
A fight between the state of Alabama and its largest city over which has the right to set a minimum wage made headlines last week. But similar struggles over local control have quietly occurred across the country in the past few years. Are people beginning to notice?
City of Birmingham vs. State of Alabama
The starting gun in the race between the city of Birmingham and the Alabama legislature sounded last August when the city council voted to raise the hourly minimum wage for private employees in Birmingham to $8.50 on July 1, 2016 and to $10.10 on July 1, 2017. Alabama is one of five states without a minimum wage, so most employers are subject only to the federal hourly minimum of $7.25.
When lawmakers returned to the state capitol early this year, they introduced legislation to preempt — essentially block — Birmingham's planned wage increase. In response, the council sped up their ordinance's timeline and voted last Tuesday to make the planned $10.10 hourly minimum wage in Birmingham effective immediately. Two days later, the legislature passed, and Governor Bentley (R) signed, legislation (AL HB 174) blocking Birmingham or any other local government from enacting its own minimum wage.
While it appeared Birmingham had reached the finish line first, the city's ordinance would not officially go into effect until Sunday, when it would be printed in the local newspapers for public notice. Therefore, with Governor Bentley's signature on Thursday, Birmingham's attempt to mandate a minimum wage in Alabama was thwarted.
Birmingham City Council President Johnathan Austin (D) released a statement accusing the legislature of “keeping their boots on the necks of people in desperate need of financial relief” and vowing that “the fight has just begun." A legal challenge is anticipated, but the state is expected to prevail. Local governments are free to exercise only the powers granted by the state. Thus, when a municipality passes an ordinance that conflicts with a state statute on the same subject matter, the state law preempts (and invalidates) the local ordinances (unless, of course, the state constitution provides localities with express authority in the area).
Alabama State Senator Slade Blackwell (R) responded with an op-ed arguing that the legislature's “decision to keep the federal minimum wage as the uniform standard was the right call for both employers and workers.” Blackwell characterized the ordinance as “disastrous” and a “catastrophic blow for businesses and workers in the Birmingham area.”
Local Action Generates Confusion for Employers
States and localities have taken the lead in raising the minimum wage since the last federal increase in 2009. President Obama called for a national wage of at least $10.10 in 2014, and more recently, the “Fight for $15” campaign has had some success on the local level. The National Employment Law Project (NELP) reports that 14 cities, counties, and states approved $15 minimum wages through executive orders, local laws, or other means in 2015.
However, minimum wage levels are far from the only disagreement between state and local governments. Progressive groups and labor unions are pushing for aggressive new mandates on employers’ relations with their employees. Activists have had growing success at the local level advocating guaranteed paid employee leave for illness, vacation, and family issues in state legislatures.
Employers emphasize that these local actions create a confusing patchwork of employee benefit and wage compliance requirements. With these concerns in mind, approximately fifteen states have taken action to preempt local ordinances that mandate employer benefits, minimum wages, or both, that exceed state and federal requirements. Proponents point to the economic benefits of keeping a unified and predictable environment for employers throughout the state.
States Playing Whack-a-Mole
Beyond employment benefits and wage requirements, localities have passed their own bans on disposable plastic bags and hydraulic fracturing, among other issues. In response, state lawmakers have had to play whack-a-mole to block new local mandates as they surface.
For instance, in 2014 Alabama passed a preemption bill (AL HB 360) blocking localities from mandating certain paid employee leave. The legislature neglected to include wage increases in the 2014 legislation, which prompted the quick passage of this year's law. And if Birmingham or any other city in the state decides to pass a predictive scheduling mandate, a plastic bag ban, or any other ordinance the state dislikes, the legislature will have to act once again (if it deems these local actions unwarranted).
As we reported last year, Michigan passed a broad preemption bill to get ahead of the newest mandates advocates are passing locally. Michigan's “Local Government Labor Regulatory Limitation Act” (MI HB 4052) is arguably the most comprehensive state preemption bill enacted so far and includes paid and unpaid leave, minimum wage, prevailing wage, benefit mandates where the employer would incur an expense, E-Verify, ban the box, and other union activity.
Other states debating local preemption bills this year include Arizona (AZ HB 2579), Idaho (ID HB 463), New Jersey (NJ SB 488), Washington (WA HB 2491), and Virginia (VA HB 1371). Similarly, Indiana (IN SB 20), Arizona (AZ HB 2191), and Kansas (KS HB 2576) are debating bills that would prohibit localities from passing the latest employer mandate from San Francisco: "predictive scheduling.”
States have quietly passed laws preempting local ordinances for years. State legislators have avoided direct conflicts with cities by grandfathering local ordinances already on the books and passing legislation before local action had much traction. It's not yet clear whether last week's episode in Alabama will result in additional attention to local preemption.