Dive Brief:
- Workers in Birmingham, AL, will know soon whether the $10.10 minimum wage increase the city council approved but the state legislature denied will stand, according to a report from The Nation. A federal judge is hearing arguments in the case. If upheld, the new rate becomes effective in July 2017.
- The federal minimum wage of $7.25 was standard across Alabama until the city council voted to raise it. Alabama legislators argue that only the state can legally set a minimum wage, not local government, such as towns, cities and counties. State lawmakers passed a bill last February barring local municipalities from setting minimum wages.
- African-American workers, backed by the local NAACP and Alabama’s legislative Black Caucus, contend that denying the minimum wage the city council proposed violates both the 1965 Voting Rights Act and the equal protection clause of the U.S. Constitution, arguing that black citizens are disproportionately affected by the state's legislation.
Dive Insight:
As Alabama’s case goes to court, municipalities across the country are setting minimum wages. High profile wage law decisions in the past year included Arizona and Kentucky. The suit in the Birmingham case was originally filed back in April, and the plaintiffs said they would seek an injunction of the bill rather than monetary damages. Nationwide, 15 states have laws against such ordinances.
Most state and local governments can set their own minimum wage but can’t go below the federal standard. Living wage laws that mandate raises may be difficult to enforce in practice, as many employers have ignored or attempted to work around the laws. Companies must keep up with changes in the minimum wage and the court challenges that might follow. Wage disparities and inaccuracies can foster costly claims against employers.
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