On October 20, 2016, the Kentucky Supreme Court decided in Kentucky Restaurant Association v. Louisville-Jefferson County Metro Government that Louisville-Jefferson County did not have the authority to impose a minimum wage rate that differs from the state’s minimum wage rate. In early 2015, Louisville-Jefferson County passed a minimum wage ordinance establishing a minimum wage of $7.75 per hour effective July 1, 2015. The local law also provided for incremental increases for subsequent years, adjusted in part to reflect the Consumer Price Index. The plaintiffs including Kentucky Restaurant Association, Inc., Kentucky Retail Federation, Inc., and Packaging Unlimited, LLC argued that Louisville-Jefferson County did not have the authority to enact an ordinance requiring a higher wage rate than the state minimum wage statute. Louisville, on the other hand, argued that being a first-class city, it possesses enhanced authority. Back in 2000, Louisville was afforded a special privilege of consolidating its government with that of the county to form one body for governing the entire county.
The Kentucky Supreme Court concluded that a local government’s “power or function is in conflict with a statute if it is expressly prohibited by a statute or there is a comprehensive scheme of legislation on the same general subject embodied in the Kentucky Revised Statutes.” Thus, making the ordinance invalid. The Court’s conclusion also impacts the Lexington-Fayette County ordinance (#130-2015) establishing a minimum wage of $8.20 per hour effective July 1, 2016. Thus, employers in Louisville-Jefferson and Lexington-Fayette counties are only required to pay their minimum wage employees the state minimum wage rate.