Home » Kentucky Supreme Court rules Louisville lacks authority to raise minimum wage

Kentucky Supreme Court rules Louisville lacks authority to raise minimum wage

Also applies to Lexington

LEXINGTON, Ky. (Oct. 20, 2016) — The Kentucky Supreme Court, in a 6-1 ruling, said today that Louisville Metro Government does not have the authority to raise the city’s minimum wage. The law was originally upheld in Jefferson Circuit Court.

The Louisville ordinance was approved by the Metro Council and signed by Mayor Greg Fischer in December 2014. It took effect with a $7.75 minimum on July 1, 2015. The minimum had been set to reach $9 an hour on July 1, 2017.

The ruling would negate a similar move to raise the minimum wage in Lexington. Lexington’s measure would have raised the minimum wage to $10.10 per hour over three years.

“This morning, the Kentucky Supreme Court struck down Louisville’s minimum wage ordinance,” said Susan Straub, director of communications for Lexington Mayor Jim Gray. “This opinion effectively prevents cities, including Lexington, from increasing the minimum wage. Lexington’s local minimum wage ordinance has been invalidated.”

Councilmember Jennifer Mossotti had introduced the Lexington minimum wage ordinance.

“I am deeply disappointed with the Kentucky Supreme Court ruling striking down Louisville’s minimum wage law, which also invalidates Lexington’s recent minimum wage increase but I certainly accept the decision,” Mossoti said.

“This decision, in essence, means that many of those less fortunate workers in Louisville and in Lexington will continue to struggle to pay for basic needs such as housing, transportation, child care, food and other essentials. Today’s ruling will potentially undo the small financial gain that many low-wage employees in both cities had enjoyed in recent months. I am hopeful that employers in Louisville and Lexington who had adjusted the hourly wage for those affected individuals will ultimately choose to not reverse the move.

In its ruling the Kentucky Supreme wrote:

“The law on this issue is clear. A local government’s “power or function is in conflict with a statute if it is expressly prohibited by a statute or there is a comprehensive scheme of legislation on the same general subject embodied in the Kentucky Revised Statutes . . . .” KRS 82.082(2). In that same vein, (an) ordinance . . . cannot forbid what a statute expressly permits. . .” City of Harlan v. Scott, 162 S.W.2d 8, 9 (Ky. 1942). Neither Home Rule nor Louisville Metro’s first class distinction alter this rudimentary principle.

The Ordinance at issue here requires businesses to pay workers a higher wage than the statutory minimum. KRS 337.275(1). In other words, what the statute makes legal, the Ordinance makes illegal and, thus, prohibits what the statute expressly permits. This is precisely the type of “conflict” that is forbidden under Section 156b of our Constitution and KRS 82.082(2). Accord Wholesale Laundry Bd. Of Trade, Inc. v. City of New York, 17 A.D.2d 327 (N.Y. App. Div. 1962) (invalidating a local ordinance that “forbids a hiring at a wage which the state law permits and so prohibits what the state law allows. Semantic exercises in this connection cannot change the concept.”), aff’d without opinion, 189 N.E.2d 623 (N.Y. 1963).

Therefore, the Ordinance is invalid unless additional statutory authority permits municipalities to raise the minimum wage. Louisville Metro cites KRS 337.395 as one such provision:

  • Any standards relating to minimum wages, maximum hours, overtime compensation, or other working conditions, in effect under any other law of this state which are more favorable to 5 employees than standards applicable hereunder shall not be deemed to be amended, rescinded or otherwise affected by KRS 337.275 to 337.325, 337.345, and 337.385 to 337.405 but shall continue in full force and effect until they are specifically superseded by standards more favorable to such employees by operation of or in accordance with KRS 337.275 to 337.325, 337.345, and 337.385 to 337.405 or regulations issued thereunder.”