A Douglas County judge heard arguments Thursday over whether the City of Omaha has authority to set a higher minimum wage than that required by state law.
The Omaha City Council passed an ordinance earlier this year to maintain a $15 minimum wage for workers of all ages. It was in response to the Legislature’s controversial passage of LB258, or the Wage Act, which decreased the minimum wage for 14- and 15-year-old workers to $13.50 per hour.
Omaha’s ordinance, which also links annual minimum wage increases to the Consumer Price Index, is set to go into effect Oct. 1.
The State of Nebraska, represented by Attorney General Mike Hilgers, sued the city over the ordinance, arguing that the city lacks authority to regulate minimum wage when the Legislature already enacted comprehensive legislation on the issue. At the Thursday hearing, the state argued for a temporary injunction to prevent the ordinance from going into effect as planned.
Douglas County District Judge Timothy Burns took the arguments under advisement and said he would issue an order on the injunction “as soon as I can.”
Cody Barnett, an assistant attorney general, said Thursday that cities like Omaha have no authority to “rewrite state statutes on statewide issues.” A city ordinance “must yield” to a state law when there is a conflict, he said.
“Municipalities are creatures of the state,” Barnett said. “They have no powers except that which the state has given them – and the state has given municipalities like Omaha wide leeway and authority. But it has not given them the authority to rewrite state laws.”
Municipal regulations are not expressly preempted by the Wage Act, meaning that the text of the law does not explicitly prohibit cities from regulating minimum wage. But Barnett said the ordinances are subject to implied preemption under federal principles of field preemption and conflict preemption.
On field preemption, Barnett argued that the Legislature has “occupied the field” by comprehensively regulating minimum wages and labor practices, leaving no room for the city to regulate. Barnett also said there is a conflict between the Wage Act and the city ordinance because it would be impossible for an employer to follow components of the Act and the ordinance at the same time.
“The Legislature clearly says that employers may pay youth at a certain age a minimum wage lower than the statewide minimum wage,” Barnett said. “Omaha’s ordinance says they may not. It says all employers must pay each employee the statewide minimum wage of $15 plus the growth formula. There’s no way to reconcile those two provisions. An employer who takes the Legislature at its word and pays a lower amount to youth will be in violation of the Omaha ordinance.”
James Powers, arguing for the City of Omaha, said there is “no conflict” between the two provisions because an employer following the Omaha ordinance would not be in violation of state law. And he said that the Legislature could have expressly preempted municipalities from further regulating the minimum wage if that was the intent.
“The state could have said, ‘Point blank, no municipality or city or village is entitled to pass a law that grants a minimum wage higher than this,’” Powers said. “The answer is not the courtroom. The answer is the Unicameral.”
The state also sued the City of Lincoln earlier this year after it adopted an ordinance to keep the minimum wage for all workers at $15 an hour. Lancaster County District Court Judge Lori Maret granted a temporary injunction in July to prevent the enforcement of the ordinance in Lincoln, finding that the state’s preemption arguments were “strong enough” to warrant an injunction.