Court of Appeal Rules that Charter Cities Must Pay Minimum Wages under the California Labor Code

In Marquez v. City of Long Beach, the California Court of Appeal held that charter cities must comply with state minimum wage laws. The Court found that the state’s authority under the California constitution to set minimum wages laws overrides charter cities’ authority to govern themselves on issues related to municipal affairs.

Article XI, section 5 of the California Constitution authorizes charter cities to govern themselves on issues related to municipal affairs. For more than century, charter cities and counties had relied on this provision, known as the home rule doctrine, to argue that they are not subject to wage and hour laws under the California Labor Code. In this case, plaintiffs Wendy Marquez and Jasmine Smith filed a wage and hour class action alleging the City of Long Beach had failed to pay some workers at or above the minimum wage. The Trial Court dismissed the claims, finding that, under the home rule doctrine, the authority to set employee compensation is a municipal affair that is reserved to the City as a charter city.

The Court of Appeal reversed the Trial Court’s ruling and reinstated the workers’ wage and hour claims against the City. Specifically, the Court held that the state minimum wage laws apply to charter cities because they apply to every industry regulated by the IWC wage orders and to employers in the private and public sectors alike. Despite more than century of home rule doctrine, the California Supreme Court had not squarely resolved whether charter cities are required to comply with state minimum wage laws. The Court found that while charter cities may govern themselves as to matters that are deemed municipal affairs, their authority is limited and must give way to state authority on important issues of statewide concern. According to the Court, the important statewide concern that state minimum wage laws address is to provide California workers with a living wage. The Court reasoned that article XIV, section 1 of the California Constitution gives the state the authority to apply and enforce minimum wage laws against both private and public employers. The Court further found that beginning in 1913, the Legislature has enacted minimum wage laws in order to ensure California workers are paid wages that can provide for their health and well-being. The Court noted that, like workers compensation laws, the state minimum wage laws serve the fundamental purpose of protecting the health and welfare of workers across the state. The Court found this important state interest outweighs a charter city’s interest in paying its workers less than the minimum wage.

The Court’s decision means that workers may file wage and hour claims against charter cities and counties and similar entities that violate the state’s minimum wage laws. The Court’s decision also suggests that charter cities and counties may be required to comply with other state wage and hour laws and provisions of the California Labor Code. Please contact your Union counsel if you have questions concerning this case.

By Alejandro Delgado | February 28, 2019

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