Kentucky Supreme Court Strikes Down Louisville's Minimum-Wage Ordinance

Kentucky's current minimum wage is $7.25 per hour. See KRS 337.275(1). In early 2015, the Louisville/Jefferson County Metro Government enacted an ordinance raising incrementally over a three-year period the minimum wage for all employers within its boundary, starting with $7.75 per hour in July 2015, $8.25 per hour in July 2016, and $9.00 per hour in July 2017.

The Kentucky Restaurant Association and Kentucky Retail Federation, among others, filed suit challenging the ordinance, attempting to bar its enforcement or void it altogether. In June 2015, the Jefferson Circuit Court ruled in favor of the Metro Government, upholding the ordinance.

In reversing the lower court and finding the ordinance unconstitutional, the Supreme Court first noted that local governments, like the Metro Government, are vested with broad authority, knowing Kentucky as "Home Rule." The Kentucky Constitution, Section 156b, affords local governments the expansive ability the pass laws "in furtherance of a public purpose." Such laws, however, cannot conflict with a constitutional provision or statute -- in other words, an ordinance cannot forbid what a statute expressly permits.

Here, according to the Supreme Court, the Metro Government's ordinance expressly requires businesses to pay their employees a wage higher than the statutory minimum, "precisely the type of conflict that is forbidden under Section 156b." That is, what the statute permits (an employer to pay its employees $7.25 per hour), the ordinance express forbids (an employer must pay its employees at least $7.75 per hour, starting in July 2015). The conflict, the Court held, rendered the ordinance invalid and unenforceable.

Relatedly, the Court's opinion effectively invalidates the Lexington/Fayette Urban County Government's minimum wage ordinance, enacted in November 2015, which would gradually increase the minimum wage to $10.10 over a three-year period.

For more information regarding the Kentucky Supreme Court's opinion, or to learn more about how the opinion affects you, either as an employee or an employer, please contact us at (859) 263-7884.