Minimum Wage Ordinance
On Aug. 17, 2017, the City Council approved a resolution encouraging local businesses to voluntarily comply with the minimum living wage adopted by Kansas City voters on Aug. 8.
Missouri law prevents any city from establishing a minimum wage that is higher than the state’s $7.70 per hour, so paying the higher wage would be a voluntary action by local businesses.
Further information is included in the City’s news release.
- The state minimum wage is $7.70 per hour. The federal minimum wage has been $7.25 per hour since 2009.
- On Aug. 8, 2017, a majority of voters in Kansas City approved a minimum wage of $10 per hour beginning on Aug. 24, 2017, to be increased annually by $1.25 per hour, reaching $15 per hour in 2022.
- In March, the City Council approved an ordinance that would increase the minimum wage to $8.50 beginning Sept. 18, 2017.
- Missouri state law prevents any city from raising its local minimum wage above the state rate, which limits the City’s ability to implement a local minimum living wage ordinance.
- Many businesses are asking if they must pay the higher minimum wage between Aug. 24 and Aug. 28, due to recent actions at the state and local level. However, Missouri cities (except St. Louis) have been restricted from raising the minimum wage since 2015, so the four-day gap is not relevant.
- All but 11 full-time City employees currently earn at least $14 per hour.
March 9, 2017 Update:
On March 9, 2017, the City Council passed an ordinance to establish a municipal minimum wage of $8.50 an hour. This new minimum takes effect on Sept. 18, 2017. The ordinance also calls for minimum pay rate to gradually increase, reaching $13 per hour by Jan. 1, 2023. The minimum wage can be increased or decreased by the cost of living in place on Jan. 1, 2024, and each year thereafter.
Kansas City voters get to weigh in on the issue on Aug. 8, when a $15 per hour minimum wage proposal appears on the ballot. The City Council agreed in February to comply with a Missouri Supreme Court order to put a petition initiative for a higher minimum wage on the ballot. The proposal calls for raising the minimum wage to $10 per hour by Sept. 1 and gradually to $15 per hour by 2022.
The current minimum wage is set by the state at $7.70 per hour.
Oct. 22, 2015 Update:
Mayor Sly James today led the City Council in discussion of two actions related to the minimum wage in Kansas City, Missouri.
Resolution 150908 passed 11-0 and expresses the intent of Mayor James and the City Council to support an increase in the minimum wage in Missouri. The council voted 7-4 to repeal Ordinance 150217, which raised the minimum wage in Kansas City.
Read the Mayor’s statement.
Sept. 23, 2015 Update:
What is the status of Kansas City’s Minimum Wage Initiative and the ordinance passed by the City Council on July 16, 2015?
On September 16, 2015, the Missouri General Assembly overrode Governor Jay Nixon’s veto of House Bill 722. That law includes this provision:
No political subdivision shall establish, mandate, or otherwise require an employer to provide to an employee:
(1) A minimum or living wage rate; or
(2) Employment benefits;
that exceed the requirements of federal or state laws, rules, or regulations. The provisions of this subsection shall not preempt any state law or local minimum wage ordinance requirements in effect on August 28, 2015.
This law preempts action by Kansas City to require an increase in the minimum wage beyond that established by the State of Missouri.
An election had been called for November 3, 2015, to allow voters to consider adopting an ordinance proposed by a committee of petitioners. However, this preemption will be effective on that day and would make the City’s ordinance inconsistent with the Missouri statute. Because of that unconstitutional inconsistency Jackson County Presiding Judge Justine Del Muro ordered the question removed from the November 3 ballot.
During consideration of the committee of petitioner’s proposed ordinance, the City Council developed Ordinance 150217. This ordinance would have also established a new minimum wage within Kansas City. The Council took this action after Governor Nixon vetoed House Bill 722 but before the General Assembly overrode the veto.
This ordinance never took effect because a different committee of petitioners submitted a referendum petition that postponed the effect date of Ordinance 150217 until an election was held and the ordinance was passed by the voters. Now that House Bill 722 is in effect, Ordinance 150217 will never become effective for the same reasons the Jackson County Circuit Court ordered the proposed initiative petition ordinance off the ballot.
Several thousand people signed a petition seeking to put a higher minimum wage into effect in Kansas City. Several thousand people signed a petition seeking to prevent any new higher minimum wage from being enacted in Kansas City. However, by overriding the veto of House Bill 722 the Missouri General Assembly took this question away from local Kansas City voters when it preempted all cities from establishing a minimum wage higher than the Missouri state minimum wage of $7.65 / hour.
At this time, Kansas City’s minimum wage employees will need to address potential wage increases with their employers, the Missouri General Assembly, or through a statewide initiative petition.
How then, could the City of St. Louis pass a local minimum wage ordinance and not be preempted by House Bill 722?
The St. Louis Board of Alderman passed a local minimum wage ordinance on August 28, 2015. House Bill 722 included this language:
The provisions of this subsection shall not preempt any state law or local minimum wage ordinance requirements in effect on August 28, 2015.
By passing the ordinance on August 28, 2015, as an emergency ordinance within the Charter of the City of St. Louis, the ordinance was effective on August 25, 2015, and may fall within the exception inserted in House Bill 722.
The Kansas City ordinances could not be effective on or before August 28, 2015, because of the need for an initiative election in November and the need for an election because of the referendum on Ordinance 150217.
The St. Louis ordinance has been challenged and is now in litigation. A hearing is scheduled on the St. Louis ordinance on October 6, 2015, in the St. Louis City Circuit Court.
The KCMO City Council recently passed an ordinance mandating a new minimum wage. The ordinance was most recently discussed at the Aug. 20 Council Business Session.
Businesses are advised that to determine if they are expected to comply with the new city minimum wage, they should use the city limit boundaries, rather than the business’s zip code.
In addition, please know that a notice of referendum has been filed, and the following ordinance is not yet law. If the notice of referendum is certified as valid, the petitioners will have until August 25 to submit final petitions. The election authorities will then review the petitions and if sufficient signatures are gathered, the ordinance will not go into effect until an election is held where the voters of Kansas City will decide whether to establish the new minimum wage.
The City has compiled a list of answers to frequently asked questions (FAQ) regarding the minimum wage ordinance.
COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 150217, AS AMENDED
Enacting a new Article IV, Chapter 38, Code of Ordinances, entitled “Minimum Wage” to establish a municipal minimum wage of $8.50 per hour on August 24, 2015, to increase that municipal minimum wage to $13.00 per hour by January 1, 2020, to be increased or decreased by the cost of living January 1, 2021 and each year thereafter.
BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:
Section 1. ENACTMENT OF THE MUNICIPAL MINIMUM WAGE. That a new Article IV, Chapter 38, Code of Ordinances, entitled “Minimum Wage,” is enacted to read as follows:
ARTICLE IV. CITY MINIMUM WAGE
Sec. 38-201. Definitions.
(a) “Apprentice” means a person bound to serve another for a specified time in order to learn some art, trade, profession, or business;
(b) “Director” means the Director of Human Relations;
(c) “Employ” means to suffer or permit to work;
(d) “Employee” means any individual employed by an Employer who performs at least 20 hours of work within a calendar year for an Employer whether on a part-time, full-time or temporary basis, and shall include contingent and contracted workers and individuals working through a temporary service, staffing or employment agency or similar entity. However, the term “Employee” shall not include:
(1) An individual employed by the United States, the State of Missouri or any political subdivision of the State other than by the City of Kansas City, Missouri;
(2) An individual engaged in the activities of an educational, charitable, religious or nonprofit organization where the employer-employee relationship does not, in fact, exist or where the services rendered to such organizations are on a voluntary basis;
(3) Apprentices in a registered apprentice program recognized by the State of Missouri or the Federal Bureau of Apprenticeship and Training, as well as any apprentice participating in an apprenticeship program providing significant instructional and practical experience and offered by the City of Kansas City, Missouri;
(4) Temporary employees of an educational, charitable or religious youth camp or retreat where room and board are provided to the employee, or if a day camp, where board only is provided. To qualify under this exemption the employer must hold a valid certificate issued annually by the Director of the Missouri Department of Labor pertaining to exemption of seasonal employees;
(5) Any employee that is the parent, spouse, child or other member of the employer’s immediate family. For purposes of this subsection, the employer shall include the principal stockholder of a family corporation;
(6) Interns working for a business for academic credit in connection with a course of study at an accredited school, college or university;
(7) Persons working for a business in connection with a court-ordered community service program; or
(8) Persons 17 years of age or younger.
(e) “Employer” means any individual, partnership, association, corporation, business trust, or any business organization, person or group of persons engaged in providing, selling, purchasing or investing in goods or services within the corporate limits of Kansas City, Missouri, which has a total of more than 15 employees regardless of age and regardless of location, and shall include the City of Kansas City and its departments. Employer does not include any other governmental entity which includes, for purposes of this Ordinance, any other unit of local government, the state government, and the government of the United States;
(f) “Minimum Wage” means the minimum hourly rate of compensation that an employee shall be paid;
(g) “Tips” means a verifiable sum presented by a customer as a gift or gratuity in recognition of some service performed for the customer by the employee receiving the tip; and
(h) “Tipped Employee” means an employee who customarily and regularly receives more than thirty dollars ($30.00) a month in tips.
Sec. 38-202. Minimum Wage Payment Requirements.
(a) Minimum Wage established. The Minimum Wage rate for employees shall be:
Effective Date Amount/Hour
August 24, 2015 $8.50
January 1, 2017 $9.82
January 1, 2018 $10.96
January 1, 2019 $11.98
January 1, 2020 $13.00
(b) Annual adjustments. Beginning January 1, 2021 and on January 1 of successive years the Minimum Wage shall be adjusted based upon the increase or decrease in the cost of living. On September 30, 2020 and on each September 30 of each successive year the City of Kansas City Human Relations Department shall measure the increase or decrease in the cost of living by the percentage increase or decrease as of the preceding July over the level as of July of the immediately preceding year of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) or a successor index as published by the U.S. Department of Labor or its successor agency, with the amount of the Minimum Wage increase or decrease rounded to the nearest five cents. The City of Kansas City, Missouri shall post on its website a bulletin announcing the adjusted Minimum Wage rate for the upcoming calendar year no later than ninety (90) days prior to each adjustment.
(d) Tipped Employee Minimum Wage. A Tipped Employee shall be paid a minimum cash wage directly by an Employer of no less than fifty percent (50%) of the Minimum Wage established by the State of Missouri. An Employer may consider Tips as part of wages of a Tipped Employee, but the Tips combined with the minimum cash wage paid directly by the Employer shall not equal less than the Minimum Wage as provided by subsection (a) of this Section. In the event a Tipped Employee earns insufficient Tips combined with this minimum cash wage to receive a wage at least equal to the Minimum Wage established by this Article, the Employer shall pay the Employee the difference to ensure the Employee receives a wage equal to the Minimum Wage established by this Article. All Tips received by Tipped Employees are the sole property of the Tipped Employee and shall be retained by the Tipped Employee, except that nothing in this Section shall prohibit a valid tip pool under which Tips are pooled and distributed among all Tipped Employees, provided that only the amount actually retained by each Employee shall be considered part of that Employee’s wages.
(e) Information posted. The City of Kansas City, Missouri shall post the Minimum Wage rates established by this Ordinance on its website after this Ordinance becomes effective and at least ninety (90) days prior to each adjustment.
(f) Adoption of Missouri or federal rates. The minimum wage established by this Article shall not apply if it is equal to or less than the minimum wage established by Missouri or federal law.
Sec. 38-203. Prohibitions.
(a) Retaliation. It shall be unlawful for any Employer or Employer’s agent or representative to discharge, demote, deny promotion to or in any way discriminate against an Employee in the terms or conditions of employment in retaliation for the person asserting a claim or right pursuant to this Article or assisting another person to do so.
(b) Failure to pay. It shall be unlawful for any Employer or Employer’s agent or representative to pay an Employee less than the minimum wage required by this Article.
Sec. 38-204. Remedies and Penalties.
(a) The Human Relations Department may promulgate rules and regulations regarding the interpretation, application and enforcement of this Ordinance. The Human Relations Department is authorized to receive any complaint regarding a possible or suspected violation of this Ordinance and further authorized to take appropriate steps to enforce this Ordinance, including, regardless of whether there is a complaint, investigating any possible or suspected violation of this Ordinance.
(b) Before submitting to the City Prosecutor complaints of violations, the Director shall provide for a hearing conducted by a hearing officer uninvolved with the investigation of the matter for a determination of whether or not this Article’s requirements have been met by an Employer. Failure of the Employer to participate in the hearing waives the requirement that a hearing be conducted before complaints are forwarded to the City Prosecutor.
(c) An Employer violating this Article shall be subject to a fine of up to $1,000.00 per violation. Any Employer violating any of the requirements of this Article shall be guilty of a separate offense for each week or portion thereof and for each worker or person as to which any such violation has occurred.
(d) The remedies provided in this Article are not exclusive, and nothing in this Article shall preclude any person from seeking any other remedies, penalties, or relief provided by law.
Sec. 38-205. Severability.
The requirements and provisions of this article are severable. In the event that any requirement, provision, part, subpart or clause of this article, or the application thereof to any person or circumstance, is held by a court of competent jurisdiction to be invalid or unenforceable, it is the intent of the Council that the remainder of the article be enforced to the maximum extent possible consistent with the objective of ensuring a Minimum Wage.
Sec. 38-206. Notice Posting.
As of April 1, 2016, an Employer shall post and display in a prominent location a notice that the business is in compliance with the provisions of this article and shall include the text of sections 38-202, 38-203 and 38-204 of this article.
Sec. 38-207. Procedure.
A complaint form for use in reporting violations of this Ordinance shall be available on the City webpage for use in reporting violations.
Approved as to form and legality: