Missouri Proposition A Increases Minimum Wage to $15 starting in 2026; Industry Groups Mount a Legal Challenge.

Prop A

On Election Day 2024, nearly 58% of Missouri voters voted to pass Proposition A, increasing the State’s minimum wage to $15 and requiring many businesses to provide paid sick days. This is the third time since 2006 Missourians have voted to increase the minimum wage. Missouri now joins 18 other states and the District of Columbia in requiring employers to provide sick time, and it is estimated that some 728,000 workers, or approximately 1 in 3 of Missouri’s working parents who previously did not have access to paid sick leave will now become eligible.

Minimum wage

Under the provisions of Proposition A, the Missouri minimum wage will increase from the current rate of $12.30 per hour, to $13.75 on January 1, 2025, and again to $15 on January 1, 2026. Proposition A also allows for an annual adjustment based on inflation to automatically trigger on January 1^st of each subsequent year. Additionally, if the federal minimum wage, currently set at $7.85, were to ever exceed Missouri’s minimum wage, the Missouri minimum wage would automatically increase to match the federal rate.

Certain categories of employment will be exempt from the increase, including governmental entities such as school districts, certain casual and seasonal employees, and retail workers at businesses whose annual gross volume sales are less than $500,000.

Of the estimated 2,760,000 estimated Missouri workers, the increase is projected to directly impact approximately 677,000, or 1 in 4 Missouri workers. Of those, an estimated 60% are women, and more than 86% have family incomes at or below the poverty line. When the $15 minimum wage increase goes into full effect in 2026, Missouri full-time minimum wage-earning workers who had previously earned $492 per week before taxes will see an increase to $600 per week before taxes.

With the increase to a $15 minimum Missouri will have the nation’s fifth highest minimum wage, tied with Maryland and New York, behind only New Jersey, Connecticut, California, and Washington, which currently has the nation’s highest minimum wage at $16.28 an hour.

Sick leave

Under Proposition A, beginning May 1, 2025, employers with 15 or more employees on its payroll for twenty or more different calendar weeks, consecutive or otherwise, will be required to provide one hour of paid sick leave for every 30 hours worked, or up to 56 hours, or seven days per year. Employees at companies with fewer than 15 employees can earn up to 40 hours, or five days sick leave per year. Employees will be allowed to carry over up to 80 hours unused sick leave per year.

Employees can use their earned paid sick time for mental or physical illness, injury, conditions, or diagnosis, care for a family member with a mental or physical illness, injury, conditions, or diagnosis, or for absences due to domestic violence or recovery from domestic violence for the employee or a family member.

Employer Take-aways.

Under the provision of Proposition A, starting April 15, 2025, employers will be required to provide employees with written notice about earned paid sick time. Written notice must include the contact information for the Missouri Department of Labor and Industrial Relations. Employers who do not comply with notice and posting requirements will be guilty of an infraction with each day of violation constituting a separate offense.

Employers must retain records documenting hours worked by employees and earned paid sick time taken for a period of at least three years. Although it is not required to do so, the Department of Labor and Industrial Relations may request such records in order to monitor compliance with state requirements.

If an employee uses paid sick time for three or more consecutive workdays, an employer may require reasonable documentation the paid sick time is used for purposes permitted by the law, such as mental or physical injury, care for a family member, or domestic violence. However, disclosure of the details of an employee’s personal or family members conditions cannot be required.

Use of paid sick time cannot be counted as an absence that may lead to or result in any adverse action to the employee. Employees will have the right to bring a civil action if earned paid sick time is denied or the employee is subject to any retaliatory actions. The right to bring such claims will be subject to a three-year statute of limitations. In such a civil action, if a court finds a violation it may grant relief in the full amount of any unpaid earned sick time, any actual damages, reinstatement, back pay, and an additional amount equal to twice any unpaid earned sick time as liquidated damages, as well as costs, and other legal or equitable relief.

The Department of Labor and Industrial Relations may investigate complaints regarding non-compliance and may establish means of enforcement including subpoenaing testimony, books, records, and other evidence relative to an investigation, issuing notices of violation, holding hearings on notices of violation, making determinations, and imposing fines for willful violation of up to $500 per day of each day of a continuing violation.

Any employer who willfully violates or fails to comply with any of the provisions and requirements shall be guilty of a class C misdemeanor.

UPDATE:

On December 6, 2024, a petition was filed with the Missouri Supreme Court challenging the constitutionality of Proposition A.

The petition was filed by a group of members of the Missouri business community including the Associated Industries of Missouri, the Missouri Chamber of Commerce and Industry, the Missouri Forest Products Association, the Missouri Grocers Association, the Missouri Restaurant Association, and the National Federation of Independent Business (NFIB) for Missouri.

The petition alleges that Proposition A violated the Missouri Constitutional requirements that a ballot initiative address only one specific subject, and that the title of the ballot measure clearly express its single subject. The petition also alleges the statement of fiscal summary provided for the ballot measure was misleading and insufficient, and that by exempting governmental entities and certain other workers Proposition A violates the Equal Protection Clause.

There are currently no hearings scheduled on this matter and the increase from the current minimum wage to $13.75 provided by Proposition A is still set to go into effect on January 1, 2025.