Legal battle over Lincoln's minimum wage ordinance heads to court

The city is fighting the move. 

At a hearing Thursday afternoon, Nebraska Solicitor General Cody Barnett said: "We're here today because the city of Lincoln has asserted that it can rewrite a state statute enacted by the Legislature on a statewide issue. That violated the Nebraska Constitution." 

He said cities like Lincoln don't have the authority to enact statutes that conflict with state law on matters of statewide concern.

"Lincoln's ordinance does just that," Barnett argued. 

So the judge should block it from going into effect July 18, he said. 

If not, Barnett said, the state will suffer irreparable harm. 

He said the Nebraska Supreme Court has said in prior cases that when a home-rule city, like Lincoln, enacts an ordinance, it cannot conflict with state law or be on an issue of statewide concern.

Barnett said this city ordinance does both. 

He said there is no way that an employer can comply with the state law and at the same time be in compliance with the city's new wage ordinance. 

The city's ordinance — adopted by the Lincoln City Council in May on a 6-1 vote — sets a minimum wage of $15 per hour for most workers, prevents employers from paying teens a lower minimum wage, and ties future increases to a cost-of-living index.

While minimum wage has been $15 an hour in Nebraska since Jan. 1, state lawmakers this year voted to create a lower, youth minimum wage of $13.50 for 14- and 15-year-olds and for teens up to age 19 during a 90-day training period. They also capped future yearly increases to 1.75% a year.

That law is set to go into effect July 17. 

"Those two provisions cannot be reconciled," Barnett said. "Any employer that wants to firmly comply with state law will be out of compliance with what the city has enacted here."

Barnett said the effects of Lincoln's minimum wage ordinance would "ripple beyond the borders of the city."

He said employers with locations in Lincoln and elsewhere will have to deal with two standards, which could lead to employees being laid off or contracts being renegotiated.

"It could lead to businesses pulling out of the state altogether rather than come up against this type of patchwork confusion," Barnett said. "Employers don't expect to have the chaos of different minimum wages."

City Attorney Yohance Christie said the city ordinance is lawful and doesn't conflict with state law. Lawmakers could have expressly preempted cities from  setting another minimum wage or other conditions. 

"They did not do that," he said. 

Christie said the question is: Is it possible for employers following the city ordinance also to follow state law? The answer is yes, he said. 

He said if the city ordinance had set a lower minimum wage, employers couldn't comply with both. That's not what happened here.

"It supplements state law, but does not conflict with state law," Christie said.

He said the state's Wage and Hour Law is meant to protect employees, not employers, and a minimum wage doesn't mean a city can't go above that. Just as a federal minimum wage doesn't mean states can't set a higher minimum wage. 

"It's the exact same concept here," Christie said.

He also argued that if anyone has standing to file it's a business, not the Attorney General's Office.

"They are suffering zero harm, and the reason why they're not suffering any harm is because ... any employer in the city of Lincoln who complies with the city law is also complying with state law," Christie said.

He argued it was in the public's interest to allow the city ordinance to go into effect because it maintains the status quo and is consistent with what Lincoln voters passed in 2022. 

That year, 67% of Lincoln voters (and 60% of statewide voters) approved a ballot measure increasing the state's minimum wage gradually to $15 an hour at the start of 2026 followed by annual increases tied to the cost-of-living index. 

Barnett said the will of the voters is confined to what the democratically elected representatives of the people have done. And the state changes passed with a super majority of lawmakers.

As for standing, he said, the Attorney General is standing in the shoes of the state of Nebraska, whose sovereignty is being threatened by what the city of Lincoln is doing. 

"The city has made illegal what the state has made legal," Barnett said.

Lancaster County District Judge Lori Maret set a briefing schedule and is likely to decide before July 18.