Kentucky Supreme Court Invalidates Louisville’s Minimum Wage Ordinance, Decision Impacts Lexington’s Ordinance As Well

By Sharon L. Gold

Today the Kentucky Supreme Court issued a much awaited opinion in the minimum wage battle between Louisville and business groups, siding with the business groups and invalidating the ordinance.  In Kentucky Restaurant Association et. al v. Louisville/Jefferson County Metro Gov’t, 2015 –SC-000371-TG (October 20, 2016), the Kentucky Supreme Court invalidated Louisville’s minimum wage ordinance that raised the minimum wage above the state minimum.  Louisville’s ordinance raised the minimum wage gradually to $9.00 over the next several years.  Lexington passed a similar ordinance in November of 2015 that raised the minimum wage gradually to $10.10 over the next three years.  At the time of the decision, Lexington’s minimum wage had increased to $8.20 and Louisville’s was $8.25.

In February of 2015, the Kentucky Restaurant Association, Kentucky Retail Federation and Packaging Unlimited, LLC filed a lawsuit in Jefferson Circuit Court arguing that local governments do not have the authority to raise the minimum wage.  While several states have raised the minimum wage, Kentucky’s is the same as the federal minimum of $7.25 per hour.

The Jefferson Circuit disagreed with the business groups and held that local governments had the authority to pass a minimum wage ordinance.  The business groups

Lexington Has a New Mandatory Minimum Wage Rate…For Now

By Leila G. O’Carra

The Lexington-Fayette Urban County Government’s minimum wage ordinance went into effect earlier this month, increasing the minimum wage requirements for all employers within Lexington-Fayette County.  As of July 1, 2016, the minimum wage for Lexington is $8.20 per hour.  On the same date, Louisville’s minimum wage hit $8.25 pursuant to that city’s minimum wage ordinance, which first raised Louisville’s minimum wage to $7.75 as of July 1, 2015.  Kentucky’s state minimum wage requirement matches the federal minimum wage at $7.25 per hour.

Does a local government have the authority to invoke a minimum wage that is higher than Kentucky’s requirement?  This is one of the issues that Kentucky’s Supreme Court may soon decide in the case of Kentucky Restaurant Association, et al. v. Louisville/Jefferson County Metro Government, Case No. 2015-SC-371.  If the Court answers the question in the negative, the mandatory minimum wage rates in Lexington and Louisville will drop back down to $7.25 per hour.

 

Proposed Revisions Pertaining to Federal Overtime Regulations

By Chelsea K. Painter

On Tuesday, June 30, 2015, in an attempt to “modernize and streamline” the regulations on exemptions from the Fair Labor Standards Act’s (“FLSA”) minimum wage and overtime pay requirements, the U.S. Department of Labor issued a Notice of Proposed Rulemaking (“NPRM)” which focuses primarily on increasing federal overtime pay regulatory coverage to nearly 5 million people by raising the minimum salary threshold required to qualify for the FLSA’s “white collar” exemption. Specifically, the Department proposes to:

1. Set the standard salary level at the 40^th percentile of weekly earnings for full-time salaried workers ($970 a week; or $50,440 a year) in 2016;
2. Increase the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90^th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
3. Establish a mechanism for automatically updating the salary and compensation levels going forward so as to ensure a useful and effective test for exemption.

 

The Department’s regulations have generally required each of the following three tests to be met for the white collar exemptions to apply: 1) the employee must be paid a predetermined, fixed salary that is not subject to

Senate Fails to Act on Pregnant Workers Fairness Act and Minimum Wage Bill

By Allison Grogan Buckley

Two high-profile bills pending in the Senate have failed to become law at the end of Kentucky’s 2015 regular legislative session.

In March, Kentucky’s House unanimously passed the Kentucky Pregnant Workers Fairness Act (House Bill 218), which would have required employers subject to the Kentucky Civil Rights Act to provide reasonable accommodations for “pregnancy, childbirth, and related medical conditions.” As drafted, the Act would have also amended the definition of “a related medical condition” to include “lactation or the need to express breast milk for a nursing child.” The bill was received by the Senate on February 27 and sent to the Veterans, Military Affairs, & Public Protection committee on March 2, but the Senate failed to act further on the bill before the end of the 2015 regular session.

Also pending before the Senate was House Bill 2, which would have gradually raised the minimum wage in Kentucky from $7.25 to $10.10 per hour over the next two years. Like HB 218, the minimum wage bill was passed by the House and received in the Senate. The Bill was then referred to the Senate’s Appropriations & Revenue committee, but the Senate failed to act further prior to the end of the legislative session.

 

Lexington-Fayette Urban County Council Proposes Minimum Wage Increase

By Courtney Ross Samford

Last week, the Lexington-Fayette Urban County Council joined a growing list of U.S. cities and local governments that are considering an increase in the minimum wage from $7.25 per hour to $10.10 per hour. If enacted, the proposed plan would take effect over the next three years and is expected to impact more than 31,000 employees in Fayette County who earn less than $10.10 per hour.

The Lexington-Fayette Urban County Council proposal is similar to a measure that was recently enacted by the Louisville Metro Council in 2014, which will increase the minimum wage from $7.25 per hour to $9 per hour by 2017. Louisville was the 12^th U.S. city to raise its minimum wage in 2014.

The Kentucky General Assembly is considering a state-wide increase in the minimum wage to $10.10 per hour over the next two years, but many forecasters are doubtful that the bill will pass. A similar bill failed in the Kentucky Senate last year.

Currently, twenty-nine states and the District of Columbia have minimum wages that are above the $7.25 federal minimum wage. The minimum wage in California, Connecticut, District of Columbia, Massachusetts, Oregon, Rhode Island, Vermont and Washington is $9 or higher.

While it’s difficult to anticipate which city, local government or state will be next, it’s clear that the minimum wage movement is gaining momentum. Employers must pay close attention to similar proposals in their area and be prepared to respond to the evolving environment.

 

Walmart Announces Wage Increases

By Colby F. Block

On Thursday, Walmart announced several changes to its compensation and benefits structure—the most noticeable being its hourly wage increase. Walmart states that, by April 2015, its entry-level wage will start at $9 an hour, and it will go up to $10 an hour by early 2016.

Other new measures include additional training and opportunities for internal promotion, which Walmart CEO Doug McMillon states will create clearer paths to better jobs and higher pay.

These changes are significant—Walmart is the largest private employer in the country, and this will increase wages for 500,000 of its employees. The cost to Walmart over the next year is projected at one billion dollars, but this number is actually small considering the company’s almost $500 billion in annual revenue.

Walmart’s announcement has already created quite the media frenzy. And some—noting that it is not altruism behind these changes—are already questioning Walmart’s motives. Walmart is a business, after all, so there is a bottom line. Is the goal to

Court Invalidates Rule Extending the FLSA’s Minimum Wage and Overtime Requirements to Home Health Care Workers Employed by Third Parties

By Brittany L. Hampton

The U.S. District Court for the District of Columbia struck down the U.S. Department of Labor’s regulations concerning the companionship services exemption to the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). See Home Care Association of America v. Weil, No. 14-cv-967 (D.D.C. 2014). Under the FLSA, providers of home care services employed by a third party are deemed to fall within the FLSA’s domestic employee and/or companionship services exemptions. However, the Department of Labor’s Wage and Hour Division issued a Final Rule with an effective date of January 1, 2015 (but not to be enforced until July 1, 2015) effectively eliminating this exemption by revising the definition of “companionship services” and subjecting third-party providers to minimum wage and overtime requirements imposed by the FLSA.

The National Association for Home Care & Hospice, Home Care Association of America, and the International Franchise Association brought an action challenging the Final Rule under the Administrative Procedure Act arguing that the rule was arbitrary and capricious, and inconsistent with Congress’ intent. Specifically, the plaintiffs claimed the rule would “have a destabilizing impact on