New work rules in Mpls., St. Paul set stage for battle at Legislature

A debate over who should control labor regulations like wages, sick leave and time off for new parents may be one of the top items on the Legislature's agenda in 2017.

The idea of a state law that would prohibit cities from setting their own workplace standards began percolating among business groups and some lawmakers last year, as both Minneapolis and St. Paul passed new sick leave ordinances. But now, with those cities' regulations set to kick in this summer — and Minneapolis leaders edging closer to passing a higher citywide minimum wage — the discussions about state regulation of local control have taken on a new urgency.

"They'll have to deal with health care first, and transportation is a big issue that both sides are talking about as well as the governor," said Charlie Weaver, executive director of the Minnesota Business Partnership, a group that represents many of the state's largest companies. "But uniform labor standards is something that should be in the top three."

If lawmakers do take up the issue soon after convening in January, they'll do it against the backdrop of a legal battle that's already playing out. In October, five months after the Minneapolis City Council mandated paid sick leave for most workers in the city, the Minnesota Chamber of Commerce and a handful of other business groups filed a lawsuit seeking to halt the ordinance — and to get a judge to determine if Minneapolis had the right to set its own labor rules under state law.

A Hennepin County judge heard arguments in the case in early December, but has not yet issued a ruling. Those decisions could come in the first months of 2017, but neither the business groups nor concerned lawmakers seem inclined to wait to tackle the issue at the Capitol.

Still, those who want to overrule cities' actions are likely to face an uphill battle from cities like Minneapolis and St. Paul, which have pledged to fight attempts to dismantle their ordinances, DFL Gov. Mark Dayton and DFL lawmakers supportive of labor reforms, and the League of Minnesota Cities.

Ann Lindstrom, a lobbyist for the league, said her organization is opposed to any attempts to restrict cities' power, from environmental issues to labor.

"The way we approach it is anything that says to a city: 'You can't determine that this is the best thing for this city,' is something we're probably going to be concerned about," she said.

Rep. Pat Garofalo, R-Farmington, said he expects the discussion about a law pre-empting cities from raising wages or mandating paid time off will gain traction in the House, as it did last year. He said he's concerned about the potential economic impacts of a lack of consistency in labor regulations across the state.

"There's a pretty good chance the courts are going to rule that they can't do this," he said. "But that being said, this is something that elected officials should be weighing in on to make sure."

Beyond fears of the hardships created by businesses dealing with different regulations in different cities, Garofalo said he's not convinced that Minneapolis — or any Minnesota city — needs to increase its minimum wage. Lawmakers approved a statewide wage increase in 2014, when the minimum wage was $6.15 per hour. Wages rose in 2015 and again in 2016, when they increased to $9.50 per hour for workers at large businesses and $7.75 for those at small businesses. Wages are set to increase according to inflation in 2018.

Minneapolis leaders have called for increasing wages to $15 to help combat persistent racial and economic disparities in the city. A petition aiming to put the issue to a vote as an amendment to the city's charter gained enough signatures to merit consideration, but was eventually blocked when both the city and the courts determined that it was not a proper charter amendment question.

Republicans will hold the majority in both the House and the Senate, where the issue is likely to get an early hearing — but only after more pressing matters like health care, transportation, tax and bonding bills are attended to, said Sen. Jeremy Miller, R-Winona.

Miller, the incoming chairman of the Senate's Jobs and Economic Growth Committee said he sees a pre-emption law as a "mid-level" priority and hasn't yet received any bills for consideration. He expects that a bill will be introduced for a hearing in his committee within the first few weeks of the session.

It's not clear how big of a battle the authors of those bills might face. Cam Winton, a lobbyist for the Minnesota Chamber of Commerce, said he thinks groups like his will find support from both Republicans and DFLers looking for "consistent statewide laws."

"I think a lot of the newly elected representatives and senators are coming from backgrounds in small business," he said. "So they understand what these mandates, as well-intentioned as they may be, actually mean for business owners on the ground."

But House Minority Leader Melissa Hortman, DFL-Brooklyn Park, said many of her DFL colleagues see cities' work on more progressive policies as a critical step in winning support for policies on a state level. She said she doesn't expect more libertarian leaning DFLers or Republicans will like the idea of limiting cities' ability to set local ordinances.

The governor, meanwhile, said he does not support any law that would pre-empt cities from taking action on labor issues.

Hortman said she expects the shift in power to Republicans in the Legislature — and in the federal government — may only serve to drive up interest from people looking for change on issues like wages, sick leave and family leave at the local level.

"The desire for change — positive, progressive change — hasn't stopped just because the election didn't go how some people wanted," she said.

Erin Golden • 612-673-4790