Municipal Preemption

Author: Melissa A. Silver, XpertHR Legal Editor

Preemption is a doctrine wherein states prohibit local governments from enacting regulations that are greater than or inconsistent with state or federal law. Preemption tends to make regulation more consistent and predictable for employers and employees alike. Although this practice promotes consistency in administration within a state, a number of preemption laws are being challenged in court.

1. Minimum Wage

Laws that forbid localities from adopting minimum wages have emerged as a significant trend. Almost half of states already have such a law, and legislation has been introduced in several more. In fact, Iowa recently passed a preemption law prohibiting cities and counties from adopting, enforcing or otherwise administering local minimum wage ordinances. As a result, Polk County workers did not get to reap the benefits of a minimum wage ordinance that was scheduled to go into effect on April 1, 2017, which would have given them a raise in pay over the state minimum wage.

Similarly, Birmingham, Alabama, had passed a minimum wage ordinance that was higher than the federal minimum wage (Alabama does not have a state minimum wage). However, the state enacted a preemption bill that prevented the Birmingham bill from going into effect.

2. Discrimination

Although federal law does not explicitly protect individuals from workplace discrimination based on their gender identity and sexual orientation, many states and cities have passed laws providing such protections. However, some states have gone in the other direction and passed laws prohibiting municipalities from expanding discrimination protections.

For instance, in 2016, North Carolina became the focus of the transgender workplace rights debate when it passed the controversial bill known as the "bathroom bill." That law preempted local and municipal governments from adopting any ordinance expanding an employer's requirements under state law regarding the compensation of employees or employee discrimination protections on the basis of gender identity or sexual orientation. On March 30, 2017, North Carolina enacted a new law repealing state statutes prohibiting local governments from enacting laws providing greater benefits than those provided under federal or state law and replaced it with a new law preempting any local government in North Carolina from enacting or amending an ordinance regulating private employment practices. This law goes beyond the regulation of restrooms, but any law that regulates employment. The law expires on December 1, 2020.

3. Leave Laws

Since there is no federal paid sick leave law available to private employees, several states and localities have been actively passing legislation giving greater workplace rights than required by federal law. At the same time, a number of states - including Florida, Georgia, Louisiana, Missouri and most recently Ohio - have enacted laws preventing local governments in their states from passing paid sick leave laws. However, more than a dozen states have preempted various forms of leave from paid or unpaid leave to sick leave to parental leave to family or medical leave.

4. Ban the Box

Several states and municipalities have adopted "ban the box" laws, which require an employer to remove the box from job applications that asks applicants if they have been convicted of a crime. New Jersey's Opportunity to Compete Act (Act) became effective March 1, 2015, and prohibits an employer from making any oral or written inquiry about an applicant's criminal record during the initial employment application process. The Act also preempted local ban the box ordinances that were adopted prior to March 1, 2015. As a result, the law preempted Newark's much broader ban the box ordinance.

Further, although there are no express "ban the box" ordinances in Mississippi, the state did pass a law prohibiting municipalities from adopting an ordinance that in any way interferes with an employer's ability to become fully informed about the background of an employee or potential employee for the purpose of creating or maintaining a fair, secure, safe and productive workplace.

5. Future Preemption Laws

There are more preemption laws on the horizon, with a law in Arkansas prohibiting local governments from enacting employment laws providing greater employment benefits than that of federal or state law becoming effective in August 2017. Under that law, employment benefits mean anything of value that an employee may receive from an employer in addition to wages and salary. This is very broad and covers, among other things, paid or unpaid days off from work for holidays, sick leave, vacation and personal necessity. However, the law does not preempt any state law or local minimum wage ordinance requirements in effect on the effective date of this law.

Further, Pennsylvania is considering a preemption law that would impact Philadelphia's wage equity law, which prohibits employers from inquiring into an applicant's salary history that is scheduled to become effective on May 23, 2017. In addition, Minnesota has proposed legislation that would, among other things, prohibit local governments from adopting a minimum wage or leave ordinance.

Since these bills are on the rise, employers should stay on top of these developments, especially if they employ workers in multiple states.