Raising New York City’s Minimum Wage: Why is this a State Issue?

by Michael Cabasso

Mayor Bill de Blasio has called for state legislation for a minimum wage raise in New York City.  Currently, New York State’s minimum wage stands at $8.00 an hour.  De Blasio proposes a City raise to $11.75 an hour.  Last year, the New York State Legislature agreed to a plan that increases the minimum wage rate.  Under this plan, the $8.00 wage will be increased to $8.75 in 2015 and $9.00 in 2016.

Currently, minimum wage is set by the New York State legislature under N.Y. LAB. LAW § 652.  New York City Mayor Wagner attempted to adopt NYC minimum wage laws in the early 1960’s.  The City believed this legislation would not supersede NY State law.  In Wholesale Laundry Bd. of Trade, Inc. v. City of New York, 17 A.D.2d 327 (1962), the New York Supreme Court Appellate Division ruled that the City’s minimum wage law was inconsistent with and preempted by state law.  At the time, minimum wage was set at $1.00 an hour with a planned increase to $1.25 an hour.  The New York City Legislature created a citywide law that increased the minimum wage to $1.25 an hour with a planned increase to $1.50 an hour.  The mayor’s contention was that New York’s law did not limit the state law but ran concurrently.  The City reasoned that the local minimum wage law acted in the way that local penal laws may extend punishment for certain crimes.  The City believed that the minimum wage law acted as an extension to State law and would be permissible.  The Court did not agree.  The Court stated that “where the extension of the principle of the state law by means of the local law results in a situation where what would be permissible under the state law becomes a violation of the local law, the latter law is unauthorized.”  The City’s minimum wage law violated this principle because it prohibited a business from hiring a person at a wage which the State would allow.  Under this reasoning, the City’s law was st ruck down.

The Court of Appeals later affirmed this case in a narrow 4-3 decision.  The dissenting opinion argued that the proposed law did not prohibit or run inconsistent with state law but rather supplemented and aided the stated policy.  The City went back to court in 1964 after a new constitutional amendment concerning home rule powers went into effect (Article IX of the NYS Constitution).  The trial court rejected this challenge and the appellate and court of appeals affirmed.

Since the ruling came down, New York has gone through significant socio-economic and political changes.  Considering that the court of appeals decision was a 4-3 split in 1963, it is possible that Mayor de Blasio and New York City could challenge this judgment in hopes that the court would revisit this 50 year old decision.

Also aiding Mayor de Blasio in his push for a citywide minimum wage is the installment of this practice in other major cities around the nation.  In 2003, Santa Fe and San Francisco enacted some of the first citywide minimum wage laws.  According to a University of New Mexico study in 2006 and a University of California 2007 study, there was little, if any, noticeable effect on employment growth to industries employing low-wage workers or business closures.  If the Mayor chose to rally Albany rather than challenge the decision preventing the City’s legislature from enacting a citywide minimum wage, these other municipalities can be used as examples of success.

The path to creating citywide minimum wage laws for New York City has been described as an uphill battle for Mayor Bill de Blasio.  However, with a changing socio-economic and political climate, now may be the time where these laws may successfully become enacted.