A dramatic showdown between Minneapolis city officials and business leaders landed in a courtroom Friday, when a Hennepin County judge weighed whether to block the city from imposing a $15 minimum wage.
District Court Judge Susan Burke heard oral arguments in the Minnesota Chamber of Commerce’s request for a temporary restraining order against the city of Minneapolis. The Chamber and three co-plaintiffs sued the city in November, claiming that the ordinance phasing in a $15 minimum wage is illegal and will hurt businesses.
Chris Larus, the attorney representing the chamber, argued in court Friday morning that the ordinance conflicts directly with the Minnesota Fair Labor Standards Act, he said, because it requires employers — including some outside the city — to pay more than the state minimum wage.
“The ordinance reflects a clear intent to supplant the Legislature’s careful policy choices,” Larus said.
Minnesota’s hourly minimum wage is $9.50 for large employers — those with annual gross revenue of $500,000 a year or more — and $7.75 for small employers. Those rates will rise with inflation in 2018.
Under the Minneapolis ordinance, large businesses — those with 100 or more employees — must phase in the $15 minimum wage by July 1, 2022. Small businesses have until July 1, 2024.
Wage increases will start for large employers on Jan. 1, when they’ll be required to start paying employees $10 an hour. Employers located outside the city that send employees into the city for their work will also be required to follow the Minneapolis ordinance.
Larus pushed back on that Friday, arguing that applying the ordinance to businesses outside Minneapolis places an undue burden on them to not only pay the higher wage but also track how much time employees spend in Minneapolis.
Burke pushed Larus, and later Assistant City Attorney Sarah McLaren, to quantify the effect on employers and low-wage workers. Both attorneys struggled to give specifics, especially when Burke asked them to describe what the effect would be if her decision is overturned by the Court of Appeals.
While Larus argued the ordinance would cause irreparable harm to employers, McLaren countered that the more significant impact would be on low-wage workers who stand to benefit from higher pay on Jan. 1.
“There’s no need to assume this is going to be a terrible hurt to businesses in Minneapolis,” McLaren said.
McLaren also countered Larus’ argument that state law pre-empts the city’s ordinance. State law doesn’t prohibit employers from paying more than the minimum wage, she said — as with the city’s mandatory paid sick-leave ordinance, it’s possible for employers to meet city requirements and follow state law at the same time.
The chamber and the city made similar arguments in 2016, when the chamber challenged the paid sick-leave ordinance in court. In January, a Hennepin County judge said the city could move forward with the ordinance, but apply it only to employers based in the city. The Minnesota Court of Appeals upheld that ruling in September.