Proposition A faces legal challenges, leaving employers and employees on unsteady ground

An overwhelming majority of Missouri voters cast their ballots in favor of a measure that would compel employers to provide paid sick leave to employees. Now a legal challenge brought by the measure’s opponents will be heard before the state’s highest court.

Proposition A — a ballot measure that passed with nearly 58 percent of the vote — raises the state’s minimum wage and institutes paid sick leave requirements. Despite its looming deadline for implementation, it is now facing legal challenges that will be heard before the state’s Supreme Court in March.

For advocates like Richard von Glahn, policy director with Missouri Jobs with Justice and an intervenor in the ongoing suit against the proposition, the new law is a milestone in terms of providing a living wage and fair leave policies for the state’s workers.

Missouri Jobs with Justice was one of the key leaders of the movement to put Proposition A on the ballot.

“We had hundreds of members all across the state gather over 100,000 signatures and put the issue on the ballot, knocked over 100,000 doors in the lead up to the election, because we want, we believe, we should have an economy that works for everyone, regardless of your zip code, your race, your gender or any other characteristics people might have,” von Glahn said. “That wasn’t happening for many Missourians.”

Approximately one month after the measure passed business groups filed a petition with the Missouri Supreme Court asking for the proposition to be declared invalid.

Marc Ellinger, an attorney with Ellinger Bell in Jefferson City, is part of the team representing these businesses.

Attorneys and employees are hopeful the high court will render an opinion quickly to meet this deadline. However, employers must begin preparing for the new law to avoid litigation and labor law violations.

“We’re hopeful that it’ll be thrown out,” Ellinger said. “The sick leave requirement goes into effect on May one so a decision as soon as possible will be helpful for employers, so that they can make a decision whether they’re going to have to go forward with this new burden or whether the court will throw it out and they will be able to continue functioning and operating their businesses.”

What to know about Prop A

Preparing clients for Proposition A has been “all consuming,” Ogletree Deakins shareholder Melissa Pesce said.

“Every single day I’m speaking with clients — current clients (and) new clients — reaching out, wanting to understand better the application of the statute, whether it applies to them (and) if they can use their existing paid time off policy,” Pesce said.

One of the provisions in the statute, Pesce said, allows employers who already have a paid time off policy that meets or exceeds the requirements of the statute to continue with that policy under the same terms and conditions as the state’s paid sick leave law.

The statute requires employers to provide one hour of paid sick leave for every 30 hours that an employee works. The burden of documenting this accrual is on the employers, according to Max Mosely, an associate with Baker Sterchi Cowden & Rice.

“It’s always very important for employers to be mindful that they have the responsibility of maintaining records as efficiently as possible to be able to demonstrate that they are abiding by all legal standards as well as we think, in the best interest of their employees,” Mosely said. “For example, for the sick paid leave, that comes with earned time. So, the emphasis really needs to be on the employer to make sure that they’re well aware of what every employee’s hours are, as well as how those hours are contributing to their sick (leave).”

Missouri’s adoption of paid sick leave requirements is in line with a national trend, according to Bill Martucci, a partner with Shook Hardy & Bacon.

“In the United States now, there are at least 20 to 21 states that have statewide paid sick leave laws. Three of those states enacted those laws by ballots, that is by an election, and those three states in 2024 were Alaska, Missouri and Nebraska,” Martucci said. “In addition to those 20 to 21 states or more, there are approximately 30 local municipalities or jurisdictions that have passed paid sick leave laws across the country that apply to private employers.”

The passage of this law in Missouri is particularly significant to attorneys representing employers. As Pesce observed, many clients who already have some form of paid leave will need to ensure that their policies comply with the new statute or will have to tailor these policies so that they meet the new requirements.

“In that regard, there probably are many details that one could delve into, but perhaps there are a handful that are most significant to consider and that is that in Missouri, by and large, private employers will be governed by the new law,” Martucci said. “There is, of course, a challenge in the courts to the law. Most commentators are of the opinion that that challenge is meaningful but eventually, some approach will be undertaken that would provide for paid leave.”

Whether this law goes into effect as anticipated is a bit of an open question, Martucci said. But for most attorneys advising employers, it’s wise to anticipate that it will become effective.

“This legislative effort as set forth through this most recent election is another indication of how the trend throughout the United States is to be ever more protective of individuals and their needs for leave as it relates to a variety of reasons,” Martucci said. “Understanding that is helpful for those who advise individuals and those who advise employers, because that trend is supported by societal interests.”

There has been quite a bit of confusion regarding the new law, Pesce said. Martucci acknowledged that Missouri’s statute is more protective than those seen in some of the other states.

“First of all, this is something that a lot of employers are just not used to seeing — this type of a mandate in Missouri. But secondly, for multi-state employers who have, say, operations in Missouri, but also in other states that maybe have paid sick leave mandates, this mandate is a little more expansive than some of the other states, certainly not the most, but a lot of states, even including states like California, provide for less paid sick leave than what Missouri employees are going to be getting under the statute,” Pesce said. “So, I think a lot of the confusion is trying to reconcile, for multi-state employers, how Missouri’s paid sick leave statutes will interact with other paid sick leave laws in other jurisdictions.”

One of the confusing aspects of the statute for employers is the use cap, Pesce said. The statute provides a use cap of 56 hours per year, but there is no accrual cap. Additionally, she said she has seen confusion among her clients in terms of the carryover provision of the law. While these provisions are causing some confusion, they serve to limit the amount of paid sick leave employers will have to provide annually.

“The key to the statute is there’s no accrual limit, there’s no accrual max, but there is a max on use, and that’s 56 hours, and there is a maximum carryover, and that’s 80 hours,” Pesce said. “The final piece to that is Missouri does not require payout of unused paid sick leave at the time of termination. So even if an employee accumulates a large bank of paid sick leave that can’t necessarily be used because of the 56-hour cap, if the employee is to leave, that paid sick leave is not going to be paid out to the employee.”

The statute provides additional protection to employees from retaliation for using the paid time.

“What is interesting, and this will probably create some challenges for employers, is this question of how much notice must be given and what documentation should there be for requests for paid leave in this context,” Martucci said. “And in summary, there is an understanding set forth that there be reasonable notice when it is expected, anticipated absence and that when it’s unforeseeable, that the employer would be flexible in that context. (…) thus far, it appears pretty clear that an absence control policy cannot count this statutory paid time off as an absence that could somehow lead to discipline, discharge, demotion, suspension or some other adverse action.”

Legal Challenges

On December 6, Associated Industries of Missouri, the Missouri Chamber of Commerce and Industry, the Missouri Forest Products Association, the Missouri Grocers Association, the Missouri Restaurant Association and the National Federation of Independent Business jointly filed the petition asking the supreme court to overturn the will of the voters.

“Proposition A requires businesses to provide paid sick leave and creates new pathways for frivolous lawsuits against employers,” the organizations announced in a news release.

The coalition’s main arguments, as presented in this statement, against the statute are:

The Missouri Constitution requires ballot initiatives to contain a single subject. Proposition A contains at least two clear, unrelated subjects — minimum wage and earned sick leave.

The Missouri Constitution requires the title of the ballot measure to clearly express its single subject. Proposition A’s title is unclear and contains multiple subjects.

The ballot measure’s summary statement and fiscal note summary — an estimate of the ballot measure’s financial impact on state and local governments — are misleading and insufficient.

By exempting government entities and certain workers, Proposition A violates the Equal Protection Clause.

Ellinger specifically points to the fiscal note attached to Proposition A as a justification for the court to overturn it.

“The fiscal note summary itself is flawed. It doesn’t list costs to local governments, even though local governments reported that they would have costs and there’s a prior case out of Kansas City right on point on that issue that the court said that’s a flaw that requires a new election,” Ellinger said. “Also, we looked at the summary statement which is supposed to be a short description of the what the measure does. It fails to really do that.”

Additionally, Ellinger said his clients are asking for declaratory judgement that the whole of Proposition A is invalid.

“The Constitution says that a ballot measure, just like a statute, has to have one subject that’s clearly expressed in its title and Proposition A has two subjects,” he said. “It raises minimum wage, and it also creates this new sick leave requirement that’s two subjects, and that’s a constitutional flaw that makes it invalid.”

The legal pushback the new law has seen was sadly expected, von Glahn said.

“I think it is shameful that these business groups are asking judges to overturn the overwhelming will of the Missouri electorate,” he said. “The business groups had a campaign against Proposition A and what they saw is that their vision of the economy, where there are no rules on businesses, where there are no guardrails as to how workers should be treated, was rejected by the Missouri electorate. And I think what they should recognize is that guardrails make sense. They make sense for workers; they make sense for businesses. And they really should be working to implement the law and support their members in implementing the law. But instead, they’re wasting time on (…) frivolous lawsuits and lawsuits really strike at the heart of democracy.”

The Missouri State Auditor’s Office, who is part of the defense team for Proposition A, declined to comment on the pending litigation.

The case before the Missouri Supreme Court is Raymond McCarty, et al. v. Missouri Secretary of State, et al., Case no. SC100876. Arguments are scheduled for March 12.

The future

The state statute requires employers to distribute a very specific written notice about their rights under Proposition A, Pesce said.

“It’s so specific that it goes down to the size of the page and the size of the font and what has to be included in it,” she said. “The statute mentions that perhaps the DOL will create a notice that has not been done at this point.”

In fact, the Department of Labor has failed to provide guidance so far regarding the statute, she said.

“Thus far, they have not yet created a notice,” Pesce said. “I’ve been trying to work with clients to create a notice that they can use, that would be compliant and it should April 15, go around and we don’t yet have a model notice from the Department of Labor.”

Pesce and other attorneys are preparing for a bumpy roll out of the new requirements laced with a fair amount of confusion.

“That’s really where policies and preplanning is going to come into play,” she said. “Having a very, very solid policy should help to alleviate some of the ambiguity and confusion for employees and help to make sure that everybody knows what the benefit is and what the rules and the procedures are for getting the benefit. It’s really going to be the employers who haven’t planned ahead and perhaps don’t have those solid policies in place, who may see more confusion or even legal challenges as to the benefits that are going to be provided and that employees think should be provided under the statute.”