On December 6, 2018, Philadelphia City Council unanimously voted on a bill to incrementally raise the hourly minimum wage to $15 an hour for city employees and contractors by 2023. Philadelphia Mayor Jim Kenney signed the bill into law on December 20, 2018. This vote occurred about five months after Governor Tom Wolf signed an Executive Order raising the minimum wage for certain state employees, set to increase to $15 an hour by 2024. Meanwhile, under the Pennsylvania Minimum Wage Act, (PMWA), private employers are only required to pay employees the federal minimum wage, $7.25, unchanged since 2009.
Essentially, this creates a situation where local and state government employers will be legally obligated to provide employees with a $15 per hour minimum wage, but private employers will not be required to do so.
What’s at play here? Preemption.
State preemption laws vary greatly throughout the United States, in subject matter and application, but their function is identical: they prohibit municipalities from passing local laws in designated policy areas. At the outset, it is a procedural tool used to designate the state as the regulatory actor instead of a city or county. In practice, however, preemption laws are substantive in that they attach to, and therefore affect, a wide range of regulatory areas such as firearms, building safety requirements, and labor and employment laws.
Of particular note are preemptive minimum wage laws, in part, because of a recent increase in their enactment. A 2017 report revealed that 25 states passed laws preempting cities from setting a local minimum wage, with 14 of these laws enacted between 2013 and 2017. Out of the 25 preemptive states, 17 states mandate the federal minimum wage, including five states that lack a minimum wage statute altogether. Altogether, workers in 17 states remain at the will of the federal minimum wage rate with its cities preempted from setting a higher local minimum wage.
Two contrasting theories underlie preemption: Home Rule and Dillon’s Rule. States following Home Rule traditionally enable cities to regulate their own affairs through local charter provisions, whereas in Dillon’s Rule states, municipalities typically possesses only those powers expressly authorized to them by the state. Interestingly, however, Home Rule jurisdictions, such as Pennsylvania, are not immune from preemption. The source of Home Rule authority, established either by a state’s constitution or statute, can limit its scope.
Pennsylvania’s constitution establishes Home Rule authority but restricts it to powers not denied by the state legislature or state constitution. In the context of minimum wage, PMWA’s preemption provision, set forth in 43 Pa. Stat. Ann. § 333.114a, states that the PMWA supersedes local ordinances “concerning the subject matter” of the PMWA. As a result, Philadelphia, is preempted from issuing a citywide minimum wage increase extending to workers employed by private businesses.
Overall, preemption is seen as public health threat, particularly when it impacts social determinants of health. Poverty, and income inequality are well-regarded social determinants, and a growing body of evidence suggests a positive relationship between increased minimum wage and health outcomes. One study, using minimum wage law data produced by the Center for Public Health Law Research’s Policy Surveillance Program, shows that in one year, a dollar increase in state minimum wages could decrease the rates of infant mortality (by 518) and low birth weight births (by 2,790). In a densely populated city such as Philadelphia, preemptive minimum wage laws have the potential to render widespread implications on public health.
Philadelphia is only one example of preemptive minimum wage laws, and our team of researchers at Temple University’s Policy Surveillance Program at the Center for Public Health Law Research is working on a policy surveillance project that will map all state preemptive minimum wage laws in effect as of January 1, 2019.
Jessica Amoroso is a Law and Policy Analyst at the Policy Surveillance Program with Temple’s Center for Public Health Law Research.