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Kentucky court strikes down Louisville's minimum wage hike

LOUISVILLE, Ky. (Reuters) - Kentucky’s Supreme Court on Thursday struck down a Louisville law mandating that the city’s local businesses pay their workers at a higher level than the state’s minimum wage.

In a 6-1 ruling, the court said Louisville officials exceeded their authority when the city’s Metro Council passed a minimum wage ordinance in December 2014 calling for a gradual raise to $9 an hour by 2017.

The measure, passed on a party-line vote, came as other cities and states passed increases as part of a national push by labor advocates to bring the minimum wage closer to cost of living standards.

The only way Louisville and other Kentucky cities can pass a higher minimum wage is if the state’s General Assembly grants them that ability as “the sovereignty of the state still rules supreme,” Justice Bill Cunningham wrote.

Jefferson County Attorney Mike O’Connell, who represented the city in the suit, said in a statement he was disappointed with the ruling. The question now, he added, becomes if state lawmakers want to grant such powers to local governments.

A Louisville business and two statewide business organizations filed suit in February 2015 seeking to stop the hike from taking effect. However, a Louisville judge turned down that request in June just before the first raise took place.

Brent Baughman, a lawyer representing the Kentucky Retail Federation, the Kentucky Restaurant Association and Packaging Unlimited LLC, said his clients’ argument was never about the amount of the raise, but whether the city had the right to make the change.

Before Thursday’s ruling, the minimum wage in Louisville was $8.25, which is $1 higher than the current state and federal minimum.

Last November, officials in Lexington voted to gradually increase the minimum wage to $10.10 an hour by 2018. However, Thursday’s ruling now invalidates that law, said Susan Straub, a spokeswoman for Lexington Mayor Jim Gray.

According to the Kentucky Center for Economic Policy, the wage hikes helped about 76,000 workers in the state’s two largest cities.

Baughman said many companies in Louisville and Lexington already pay employees above the minimum wage, but companies that have paid the higher minimum wage will have the option to roll back their workers to the lesser hourly figure.

“Whether they will do that is a decision that they will have to make,” he said.

Reporting by Steve Bittenbender; Editing by Alistair Bell