Supreme Court hears challenges to Minneapolis wage, sick time laws

Protesters chant before the council meeting.
Protesters chant before the Minneapolis city council meeting in August 2016 before discussion of a city-wide $15 an hour minimum wage. The Minnesota Supreme Court on Tuesday heard challenges to Minneapolis wage and sick time ordinances — cases that could determine how much latitude cities have to preempt state laws.
Christopher Juhn for MPR News 2016

Two high-profile employment initiatives in Minneapolis were in front of Minnesota's Supreme Court on Tuesday, the final legal challenge to the city's so-called sick and safe time mandate and its $15 an hour minimum wage ordinance.

Both measures have survived so far in a defining legal battle over the authority of Minnesota cities to regulate employment. The court's decision will likely have a significant impact, signaling once and for all whether cities can institute any number of regulations on their own.

The minimum wage ordinance started last year, with an initial minimum wage of $10 an hour for businesses with more than 100 employees. That's inching up every July until it hits $15 for all employers in the year 2024.

Some employers are hoping to strike the local measures off the books and revert to state law — which doesn't mandate sick time and currently sets a minimum wage at $9.86 an hour for large companies, and $8.04 for small businesses.

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Attorney Christopher Larus, who represents Graco, an industrial products maker in Minneapolis, told the justices that cities shouldn't be allowed to trump state law on minimum wage.

“This city is not trying to complement the Legislature's policy decision,” he said. “The city is trying to replace them.”

The discussion at the court revolved around a number of precedents, like a long ago Richfield law banning some retail sales on Sunday, boat licensure and a failed attempt at a referendum that would have required Minneapolis police to carry insurance.

Larus focused on a provision in state law that allows officials to put off or limit scheduled hikes in the state minimum wage in an economic downturn. He cited that as proof that lawmakers intend to set limits on wage increases in Minnesota in the interest of protecting jobs.

“It is not simply to pay certain wage rates to employees. It is also to ensure that there is an increase in employment opportunities,” he said

Minneapolis City Attorney Susan Segal told the justices that wasn't what the law was about — that the city and the state both had an interest in workers in Minneapolis making what she called a livable wage.

She argued the city's minimum wage ordinance wasn't in conflict with state law, but actually written in the spirit of the state's Fair Labor Standards Act.

“It is all geared toward protecting individual employees, not protecting employers from paying livable wages to its employees,” she told the court.

The sick and safe law time law that went into effect in 2017 requires almost everyone who gets paid for more than 80 hours of work a year in Minneapolis to earn paid time off. The rule provides an hour of sick time for every 30 hours worked, up to 48 hours a year and no more than 80 hours accumulated.

The arguments over the sick leave ordinance touched briefly on the authority of cities in relation to state law, but focused primarily on the ordinance's impact outside of Minneapolis. The sick time mandate applies to people who work in the city, regardless of where their employer is headquartered — technically even overseas.

Larus said cities shouldn't have that kind of reach, particularly in jurisdictions that don't have representation in city government.

“The city here is applying its policy making decision beyond the scope of its voters,” said Larus, who represented the Minnesota Chamber of Commerce in the sick time case.

Assistant City Attorney Sarah McClaren argued Minnesota's cities have long had broad regulatory latitude, citing a precedent that let Minneapolis inspect rural dairy herds to keep the city's milk supply safe.

“There's over 100 years of precedent affirming the city's right to regulate conduct occurring within its borders,” she said.

The principle drew some of the toughest questions from the justices, exploring what it actually meant to be employed in the city — like whether just driving through counts — and where that bar should be set.