The Lawletter Vol 38 No 8
Tim Snider, Senior Attorney, National Legal Research Group
Washington, D.C. (the "District"), Mayor Vincent C. Gray's controversial veto of a "living wage" ordinance, passed by the District Council,[1] illustrates the controversy surrounding efforts by local governments to increase the minimum wage and support collective bargaining.
Under the Fair Labor Standards Act ("FLSA"), the federal minimum wage is set at $7.25 per hour. 29 U.S.C. § 206(a)(1)(C). States and localities are authorized by the FLSA to adopt higher minimum wages, and the District currently has a minimum wage of $8.25.
Against this backdrop and the arrival of WalMart in the District, the District Council enacted the Large Retailer Accountability Act ("the Act"), requiring retailers with corporate sales of $1 billion or more and operating stores in the District of at least 75,000 square feet to pay their employees a "living wage" of not less than $12.50 an hour in combined wages and benefits. The proposal included an exception for employers who collectively bargain with their workers. Existing employers would have had four years to come into compliance. The bill would have raised the annual earnings of a full‑time employee making the lowest legal wage from about $17,000 to $26,000.
The Act was obviously aimed at Wal-Mart, which, in response, threatened to suspend construction on, and the opening of, at least three of the six stores that the world's largest retailer had announced it planned to open in the District. Wal-Mart is one of the largest employers, if not the largest, of workers making the minimum wage, and the cost of compliance with the "living wage" Act in the District was seen by its management as being unacceptably high. Mayor Gray announced that he was choosing jobs over higher pay, and it is unlikely that Mayor Gray's veto will be overturned by the District Council. Many other cities that have become the focus of expansion by lower-wage employers like Wal-Mart face the same dilemma as Mayor Gray faces.
With Congress showing no enthusiasm for increasing the federal minimum wage and state legislatures wary of scaring off potential employers during a period of stubbornly high unemployment, municipalities are likely to become the focus of lobbying and agitation by labor unions and workers' rights advocates for a "living wage" that exceeds the local minimum wage. For the most part, living wage statutes and ordinances have survived court challenge by affected employers, even where many of those laws target large retail employers like Wal-Mart. See Amaral v. Cintas Corp. No. 2, 78 Cal. Rptr. 3d 572 (Ct. App. 2008). Whether these and similar living wage statutes and ordinances can be enacted despite stiff opposition by large,
well-funded lobbying groups remains to be seen. In the meantime, the FLSA is the principal vehicle for preserving the right of workers to be paid a wage that Congress considers livable.
_____________________
]See Mike DeBonis, D.C. Mayor Gray Vetoes "Living Wage" Bill Aimed at Wal-Mart, Setting Up Decisive Council Vote, Wash. Post, Sept. 12, 2013, available at http://www.washingtonpost.com/local/dc-politics/mayor-gray-vetoes-living-wage-bill-aimed-at-wal-mart-setting-up-decisive-council-vote/2013/09/12/664d7310-077d-11e3-a07f-49ddc7417125_story.htmlhttp://www.washingtonpost.com/local/dc-politics/mayor-gray-vetoes-living-wage-bill-aimed-at-wal-mart-setting-up-decisive-council-vote/2013/09/12/664d7310-077d-11e3-a07f-49ddc7417125_story.html.
