Birmingham, Alabama is poised to join more than 15 cities across the country that have adopted a municipal minimum wage higher than the federal requirement. The federal minimum wage is currently $7.25 an hour but, unless the Alabama legislature takes action, many employees in Birmingham may get $8.50 per hour beginning March 1, 2016.

The Birmingham City Council passed this ordinance back in August 2015, providing for the new minimum wage to take effect  July 1, 2016. However, the Alabama legislature recently debated a proposal to prevent cities or counties from adopting local minimum wages for private employers. Although the proposal was set aside without a vote, the Birmingham City Council decided to move up its minimum wage effective date to March 1, 2016. The ordinance moving up the effective date was sent to Mayor Bell for his signature on February 9.

What you need to know about the Birmingham minimum wage:

  • Effective Date: March 1, 2016
  • Who is Covered: All employees performing work in the geographic boundaries of the City, except those who work for non-City, government entities (think UAB and Jefferson County)
  • New Wage Rates: $8.50 per hour, then increased to $10.10 per hour as of July 1, 2017, with a cost of living increase each subsequent year
  • Retaliation Prohibited: Employers cannot discriminate or take adverse action against someone who exercises his or her rights under this new ordinance and taking adverse action within 90 days of someone exercising his or her rights raises “a rebuttable presumption” of retaliation.
  • Penalties: Individuals can bring a lawsuit for unpaid wages and liquidated damages of two times the unpaid wages, “actual damages” (undefined), and reasonable attorneys’ fees and costs.
  • More Penalties: The civil penalty is not to exceed $100 per day per employee, payable within 15 days of the citation, and the City “shall initiate a civil action to collect” the unpaid penalty, with the recalcitrant employer potentially reimbursing the City for enforcement costs.
  • Other Penalties: If the employer is found to be in violation “by any judicial or administrative proceeding” and the violation has not been cured, the City may revoke or suspend registration certificates, permits or licenses until the violations are remedied.

Advocates of these kinds of minimum wage laws (including the Birmingham City Council) say that increasing the minimum wage will help the poor and reduce their reliance on social services. Opponents say that increasing the minimum wage in Birmingham will encourage employers to work outside of the City. Birmingham will soon see who is correct. In the meantime, if you have minimum wage employees who perform work within the City limits, you need to make the appropriate wage adjustments and soon.