Overview. Arkansas, Iowa and South Carolina are three of the latest states to pass laws prohibiting local jurisdictions from passing their own minimum wage and employee benefits laws (this includes laws providing for paid sick leave).
Details.
Arkansas. On March 24, 2017, Arkansas Governor Asa Hutchinson signed Senate Bill 668 (now Act 643), which prohibits “political subdivisions” from requiring more than federal or state requirements from employers. "Political subdivision" is defined as a county, city, or town in Arkansas. Consequently cities, towns and counties in Arkansas are not allowed to establish local minimum wages or benefit requirements such as paid sick leave beyond those required under federal or Arkansas law.
Act 643 specifically states, in part:
A political subdivison shall not establish, mandate, or otherwise require an employer to provide to an employee a minimum or living wage rate or employment benefit that exceeds the requirements of federal or Iowa state law. The Act became effective immediately upon enactment (March 30,2017).
For a copy of Act 643, click here.
Iowa. On March 30, 2017, Iowa Governor Terry Branstad signed Iowa House File 295 (the Act), which prohibits cities and counties in Iowa from adopting laws that provide employees with minimum wage and benefits that exceed the requirements of federal or Iowa state law. The Act became effective immediately upon enactment (March 30, 2017).
The Act states, in relevant part:
A county shall not adopt, enforce, or otherwise administer an ordinance, motion, resolution, or amendment providing for any terms or conditions of employment that exceed or conflict with the requirements of federal or state law relating to a minimum or living wage rate, any form pf employment leave, hiring practices, employment benefits, scheduling practices, or other conditions of employment.
A city shall not adopt, enforce, or otherwise administer an ordinance, motion, resolution, or amendment providing for any terms or conditions of employment that exceed or conflict with the requirements of federal or state law relating to a minimum or living wage rate, any form pf employment leave, hiring practices, employment benefits, scheduling practices, or other conditions of employment.
The Act stipulates that an ordinance, motion, resolution, or amendment adopted prior to the effective date of the Act that violates the above section is void and unenforceable on or after the effective date of the Act.
The Iowa state minimum wage currently mirrors the federal minimum wage at $7.25 per hour. The following city and counties in Iowa have adopted ordinances that provided for minimum wages in excess of the $7.25 per hour threshold. As of March 30, 2017, these ordinances are void:
City of Tifflin $9.00
Johnson County $10.10
Linn County $8.25
Polk County $8.75
Wapello County $8.20
The Lee County, Iowa, Board of Supervisors passed an ordinance to establish a minimum wage for workers in Lee County of $8.20 per hour to be effective May 1, 2017. This ordinance is now void.
For a copy of the Act click here.
South Carolina. On April 5, 2017, South Carolina Governor Henry McMaster signed SB 218, which prevents political subdivisions from setting mandates on private businesses to provide employee benefits such as health benefits, disability benefits, death benefits, group accidental death and dismemberment benefits, paid days off for holidays, paid sick leave, paid vacation leave, paid personal necessity leave, retirement benefits, and profit-sharing benefits. The law does not, however, limit the authority of political subdivisions to establish employee benefits in employment relationships to which they are a party. The law was effective upon enactment (April 5, 2017).
For a copy of SB 218, click here.
As always, for more information about the topics covered in this Alert, please reach out to your Relationship Manager or Service Team.