by Albert L. Vreeland
************************ UPDATE 2/26/16 ************************
As expected, on Thursday, February 25, the Alabama Legislature passed a bill preempting any local legislation (city or county) imposing a higher minimum wage or mandating a minimum level of employee benefits. The bill was signed into law by Governor Robert Bentley shortly thereafter, rendering the Birmingham minimum wage hike a dead letter. Now, any changes to the minimum wage for Alabama employers will have to come from Washington or Montgomery—which seems very unlikely in the current political climate.
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As many of you are aware, the potential timing of the Birmingham municipal ordinance raising the minimum wage to $8.50 this year (and to $10.10 in 2017) and the proposed state legislation preempting local minimum wage ordinances has created significant uncertainty for employers with minimum-wage employees in the city of Birmingham.
As of now, the Birmingham minimum wage ordinance will take effect on March 1, 2016. There have been reports, however, that the city council may vote Tuesday, February 23, to accelerate the effective date to Wednesday, February 24.
Meanwhile, Representative David Faulkner’s bill, which has passed the Alabama House and will be taken up by the Senate on Thursday, February 25, would bar cities and counties from requiring that any employer offer paid leave, vacation, or a particular wage “that is not required by state or federal law.” The bill includes a preemption provision declaring that “any ordinance, policy, rule or other mandate” that conflicts with the law “is void.”
The question for Birmingham employers is what to do in the potential one-day gap if both measures pass when expected. We believe the best course of action would be to comply with the city ordinance, once effective, until the preemption bill takes effect. We do not know with any certainty when or if the preemption bill will pass and if the pending bill will be amended in any way.
More important, the city ordinance raising the minimum wage includes a civil penalty of up to $100 per day per employee for any violation of the ordinance, in addition to double damages and attorneys’ fees. Even if the ordinance is effective for only one day, the civil penalties for employers with large numbers of minimum-wage employees could be significant.
Al Vreeland is a founding member of Lehr Middlebrooks Vreeland & Thompson, P.C., in Birmingham and an editor of Alabama Employment Law Letter. You can reach him at avreeland@lehrmiddlebrooks.com.