Birmingham, Alabama will soon be the first city in Alabama to implement a minimum wage rate. Last August the Birmingham City Council passed an Ordinance establishing a minimum wage rate of $8.50 per hour starting in 2016 and increasing to $10.10 per hour in 2017. After that, minimum wage increases will be tied to changes in the Consumer Price Index. The Ordinance was initially set to go into effect on July 1, 2016, but the City Council has voted to move up the Ordinance’s effective date to March 1, 2016.
The Ordinance requires all employers in the city of Birmingham to pay at least the minimum wage rate to their employees who perform 20 hours of work or more each year within city limits. The Ordinance allows employers of tipped employees to take a tip credit of up to 50% of the minimum wage rate. Employers who violate the law are subject to a $100 penalty per day, per employee, for each day the employee(s) do not receive the minimum wage.
The move to institute the minimum wage rate in Birmingham is not without controversy. A state lawmaker has introduced a bill to the Alabama Legislature that would prohibit local governmental entities from requiring minimum leave, wages, or other benefits for employees. Currently, Alabama does not have a state minimum wage rate and uses the federal minimum of $7.25 per hour.
Birmingham joins other major cities such as Seattle, WA, Chicago, IL, Los Angeles, CA, that have adopted minimum wage rates higher than their respective state wage minimums. Higher city and county minimum wage rates also exist in northern California, New Mexico, Maryland and Missouri.
Update: Shortly after Birmingham, AL voted to raise the city’s minimum wage, state lawmakers passed a law forbidding local government entities from requiring minimum leave, wage or other benefits for employees. The state law was signed into effect February 25, 2016.