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The minimum wage fight is already being waged at the state (and city) level

Tuesday May 24th, 2016

Estimated time to read: 2 minutes, 30 seconds

The federal hourly minimum wage has remained at $7.25 since 2009. For several years, the Obama administration has asked Congress to increase the federal minimum wage, to no avail.

However, the federal minimum wage is just that: the least that employers must legally pay their employees. If a state wants to mandate a higher minimum wage, there’s nothing stopping it from doing so. In fact, 29 states and the District of Columbia have a minimum wage that currently sits above the federal requirement.

But other states have begun pulling the wage issue in the opposite direction—not just by hewing to the federal wage at the state level, but by taking the extra step to ensure that no part of the state opts to raise the wage any higher.

In this post, we highlight several states that have passed both types of legislation in 2016.

Raising the Minimum Wage

California approved a minimum wage increase in April. Starting in January 2017, the minimum wage will increase each year until it hits $15 an hour for employers with more than 25 workers in 2022. Employers with 25 or fewer workers would have an extra year to start paying the $15 minimum. Recognizing that parts of California may be more affected by economic slowdowns than others, the measure has a built- in pause button if the state goes into recession or there's a serious budget crisis, under which the increases could be halted for a year.

New York passed legislation in April that gradually raises the state’s minimum wage to $15 an hour for most workers by Dec. 31, 2018. The minimum wage will rise at a different schedule for three regions of the state and will be phased in according to two different sizes of employers—those with at least 11 employees and those with 10 or fewer. An estimated 2.3 million workers would be covered by the wage increase.

Oregon signed legislation in March that will phase in minimum wage increases over six years, to as much as $14.75 in the Portland area. The current urban area earnings floor in the state is $9.25. The measure phases in wage hikes that will top out in 2022 at $13.50 per hour in medium-sized counties and at $12.50 in more rural areas of the state. After July 1, 2023, the minimum wage will be adjusted based on the average consumer price index for U.S. cities.

Banning Minimum Wage Hikes

On the other side of the fight, several state governments have come up with a new way to hold wages at bay: Placing a moratorium on the raising of minimum wage rates at the city or county level. Here are some recent examples, all involving states where the minimum wage matches the federal $7.25 rate.

Alabama passed a law that prohibits cities and counties in the state from requiring employers to provide a “paid or unpaid leave, vacation, wage, or work schedule that is not required by state or federal law.”

The governor’s signature in February effectively voided a Birmingham ordinance, passed just a week earlier, that would have raised the city’s minimum wage to $10.10.

North Carolina’s H.B. 2, the so-called “bathroom bill,” has stirred nationwide controversy since its passage in March for its impact on transgender people. But the new law also includes an all-but- unnoticed clause that blocks local or county governments from passing any requirement “pertaining to the compensation of employees,” including wage levels, work hours, benefits, leave, and even child labor.

Idaho added language to its labor law that bans cities and counties from establishing their own wage requirements. The bill automatically became law in March after the governor took no action on it in the five days since the measure was sent to his office.

Not all of these attempts have met with success. Virginia, for example, came close to enacting its own ban in March after a bill passed both state houses. However, the measure was vetoed by the governor. It just goes to show how contentious the minimum wage issue continues to be, regardless of when or if any changes are made at the federal level.