Could a 1995 Idaho ballot initiative raise the state minimum wage to $6.25 per hour by 2000, eliminate the tip credit, end overtime exemptions, and remove farmworkers, domestic workers, and minors from the minimum wage entirely?

Plain-English summary

Petitioner Randy Ambuehl filed an initiative petition with the Secretary of State on July 7, 1995, proposing four changes to Idaho's Minimum Wage Law (Idaho Code §§ 44-1501 et seq.).

First, raise the Idaho minimum hourly wage from $4.25 to $6.25 in fifty-cent annual increments over four years (1996, 1997, 1998, 1999), reaching $6.25 effective July 1, 2000. Second, eliminate the tip credit, which then allowed employers of tipped workers to count up to 25 percent of the applicable minimum wage in tips toward minimum-wage compliance ($1.06 per hour at the $4.25 base). Third, eliminate Idaho's overtime exemptions, which were tied by reference to the federal FLSA exemptions in 29 U.S.C. §§ 203 and 213. Fourth, eliminate the categorical exemptions in Idaho Code § 44-1504 for agricultural labor, domestic service, outside salesmen, and minors under 16 working part time.

Deputy AG Thomas Gratton of the Intergovernmental and Fiscal Law Division, writing for AG Alan Lance, found no constitutional or statutory impediment to any of the four changes. The key federal point is that the Fair Labor Standards Act has an explicit savings clause at 29 U.S.C. § 218(a) preserving state authority to enact more generous wage-and-hour protections: "No provision of this chapter or of any order thereunder shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this chapter or a maximum workweek lower than the maximum workweek established under this chapter." Federal cases (Pacific Merchant Shipping Ass'n v. Aubry, 9th Cir. 1990) and state cases (Baxter v. M.J.B. Investors, Or. App. 1994; Berry v. KRTV Communications, Mont. 1993) had specifically applied this savings clause to uphold state minimum wage laws more generous than the federal floor.

The opinion does not opine on whether the initiative was wise policy, only on whether it raised constitutional or preemption concerns. It did not.

Currency note

This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Note: As of 2026, Idaho's minimum wage is still set at the federal $7.25 level (Idaho Code § 44-1502). The 1995 initiative did not become law, and Idaho continues to track the federal minimum.

Common questions

Why is FLSA preemption not a problem when a state sets a higher minimum wage?

Because Congress wrote a savings clause into the FLSA itself. 29 U.S.C. § 218(a) says the FLSA does not "excuse noncompliance" with any state or local law setting a higher minimum wage or a lower maximum workweek. So states are free to legislate above the federal floor. Below the federal floor, the FLSA controls for any worker covered by federal law (essentially anyone in interstate commerce or in an enterprise with $500,000 in annual gross sales). The Idaho proposal was strictly above the federal floor, so the savings clause did the work.

What does eliminating the tip credit actually do?

Under existing Idaho law, an employer of a tipped worker (a server, bartender, etc.) could pay a base hourly wage below the minimum and count up to 25 percent of the applicable minimum wage in actual tips received toward compliance. So a tipped worker with the $4.25 federal floor could be paid $3.25 cash plus tips, as long as actual tips brought total compensation to at least $4.25. Eliminating the tip credit means the employer must pay the full minimum wage in cash, and tips are entirely on top. This shifts wage risk from worker to employer.

What about the overtime-exemption removal?

The FLSA exempts certain categories of workers from the overtime requirement: executive, administrative, and professional employees ("EAP exemption"); outside sales; certain transportation workers; certain agricultural workers; and others. Idaho's law incorporated the FLSA exemptions by reference, so a worker exempt from federal overtime was also exempt from Idaho overtime. The initiative would have severed that link, requiring overtime pay (1.5x) for any hours worked over 40 per workweek for any worker covered by Idaho's Minimum Wage Law, regardless of FLSA exemption.

And eliminating the categorical exemptions in § 44-1504?

The pre-existing § 44-1504 carved certain categories out of Idaho's Minimum Wage Law entirely: agricultural labor, domestic service in private homes, outside salespersons, and minors under 16 working limited hours. The initiative would have repealed these carve-outs, bringing those workers under the minimum wage floor. The AG found no constitutional bar; whether each category should be exempt is a policy choice for the legislature or the voters.

Does the AG opine on whether the initiative is good policy?

No. Under Idaho Code § 34-1809, the AG's certificate of review is limited to form, style, and substantive import (constitutional and statutory issues). Policy desirability is for the voters to decide. The AG's neutral conclusion here is that the initiative did not raise constitutional or preemption defects. Whether $6.25 by 2000 was the right number, whether eliminating the tip credit would shift jobs out of restaurant work, whether ending agricultural exemptions would harm Idaho farmers, those were not in scope.

Background and statutory framework

Idaho Code § 34-1809 requires the AG to issue advisory comments on initiative petitions. The AG's role is constitutional and statutory analysis, not policy.

The Idaho Minimum Wage Law (Idaho Code §§ 44-1501 et seq.) was enacted in parallel to the federal FLSA. The two regimes overlapped, with Idaho's law generally tracking federal floors and exemptions. As of 1995, the Idaho minimum wage was $4.25 per hour, matching the federal level set by Congress in 1991.

The Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., applies to most public-sector and large private-sector employees. § 218 is the savings clause that preserves state authority to legislate more generously. § 213 lists the principal exemptions from federal minimum wage and overtime requirements. § 203 contains definitions including the "enterprise" coverage threshold.

The 9th Circuit's Pacific Merchant Shipping decision, Oregon's Baxter, and Montana's Berry all reflect the standard application: state minimum-wage laws can require more than federal law, and the federal savings clause defeats preemption challenges.

Citations

• Idaho Code §§ 34-1809, 44-1501 et seq., 44-1504
• 29 U.S.C. §§ 201 et seq. (Fair Labor Standards Act); 29 U.S.C. § 203, § 213, § 218
• Pacific Merchant Shipping Ass'n v. Aubry, 918 F.2d 1409 (9th Cir. 1990), cert. denied 504 U.S. 979 (1992)
• Baxter v. M.J.B. Investors, 876 P.2d 331 (Or. Ct. App. 1994)
• Berry v. KRTV Communications, Inc., 865 P.2d 1104 (Mont. 1993)

Source

• Landing page: https://www.ag.idaho.gov/office-resources/opinions/
• Original PDF: https://ag.idaho.gov/content/uploads/2018/04/C072895.pdf

Original opinion text

July 28, 1995
The Honorable Pete T. Cenarrusa
Secretary of State
HAND DELIVERED
Re:

Certificate of Review;
Initiative Regarding Minimum Wage

Dear Mr. Cenarrusa:
An initiative petition was filed with your office on July 7, 1995. Pursuant to Idaho
Code § 34-1809, this office has reviewed the petition and has prepared the following
advisory comments. It must be stressed that, given the strict statutory timeframe in which
this office must respond and the complexity of the legal issues raised in this petition, our
review can only isolate areas of concern and cannot provide in-depth analysis of each
issue that may present problems. Further, under the review statute, the Attorney
General’s recommendations are “advisory only,” and the petitioners are free to “accept or
reject them in whole or in part.”
BALLOT TITLE
Following the filing of the proposed initiative, our office will prepare short and
long ballot titles. The ballot titles should impartially and succinctly state the purpose of
the measure without being argumentative and without creating prejudice for or against
the measure. While our office prepares the titles, if petitioners would like to propose
language with these standards in mind, we would recommend that they do so and their
proposed language will be considered.
MATTERS OF SUBSTANTIVE IMPORT
Idaho Code §§ 44-1501, et seq., is the Idaho Minimum Wage Law (“IMWL”).
This law regulates minimum wage and sets standards for hours worked similar to the Fair
Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq. The FLSA applies to
employees of federal, state and local governments, employees engaged in or producing
goods for interstate commerce, and employees in certain other enterprises. It does not
apply to private employers who are not engaged in interstate commerce and who have
annual gross sales of less than $500,000.
The initiative would make essentially four (4) changes in the Idaho Minimum
Wage Law. The initiative would raise the minimum hourly wage by fifty cents each year
for four consecutive years, until the minimum wage would be six dollars and twenty-five

cents ($6.25) per hour commencing on July 1, 2000. Presently, the IMWL states that
employers subject to the IMWL must pay a minimum wage of four dollars and twentyfive cents ($4.25) per hour.
In addition, the IMWL presently permits tips to be included in determining
whether wages of employees receiving tips comply with the law. For example, if a
tipped employee is paid at a rate of three dollars and twenty-five cents ($3.25) per hour,
the amount of tips actually received up to a maximum of one dollar and six cents ($1.06)
(i.e., twenty-five percent of the applicable minimum wage of $4.25), can be added to the
existing hourly wage for purposes of compliance with the IMWL. The proposed initiative
would repeal this provision.
The initiative would also delete from the law the exemptions relating to overtime
pay.
Presently, the IMWL has the same exemptions or exceptions for
overtime/maximum work week requirements as provided under the FLSA, which are
expressly incorporated in the IMWL. Thus, the IMWL overtime provisions would not
apply to the classes of employees exempted under 29 U.S.C. § 213; nor does it apply to
the classes of employers found at 29 U.S.C. § 203. For example, the IMWL overtime
provisions currently do not apply to taxicab drivers who are exempted under 29 U.S.C. §
213(b)(17). The initiative would repeal such exemptions and require that all employers
who fall within the purview of the Idaho Minimum Wage Law pay overtime for
employment in excess of forty (40) hours per workweek.
Last, the initiative would repeal certain exemptions in Idaho Code § 44-1504,
which contains a list of employees who are excepted from all of the provisions of the
IMWL. The initiative would repeal the exemptions for: (1) agricultural labor; (2)
domestic service; (3) outside salesmen; and (4) minors under the age of sixteen working
part-time (unless engaged in odd jobs not exceeding a total of four (4) hours per day with
any one (1) employer).
Upon review, it is the opinion of this office that there is no constitutional or
statutory impediment to the petitioner’s proposed changes to the Idaho Minimum Wage
Law. Moreover, the FLSA has a specific savings clause which allows states to enact
more generous minimum wage laws. 29 U.S.C. § 218 provides in relevant part:
(a) No provision of this chapter or of any order thereunder shall
excuse noncompliance with any Federal or State law or municipal
ordinance establishing a minimum wage higher than the minimum wage
established under this chapter or a maximum workweek lower than the
maximum workweek established under this chapter.

Thus, Idaho may enact a more generous minimum wage and maximum workweek
law which would not be preempted by the FLSA. Pacific Merchant Shipping Ass’n v.
Aubry, 918 F.2d 1409, cert. denied 112 S. Ct. 2956, 119 L. Ed. 2d 578 (9th Cir. 1990);
Baxter v. M.J.B. Investors, 876 P.2d 331 (Ore. Ct. App. 1994); and Berry v. KRTV
Communications, Inc., 865 P.2d 1104 (Mont. 1993). The proposed initiative does not
contravene state or federal statutory or constitutional law.
I HEREBY CERTIFY that the enclosed measure has been reviewed for form, style
and matters of substantive import and that the recommendations set forth above have
been communicated to petitioner Randy Ambuehl by deposit in the U.S. Mail of a copy
of this certificate of review.
Sincerely,
ALAN G. LANCE
Attorney General
Analysis by:
THOMAS F. GRATTON
Deputy Attorney General
Intergovernmental and Fiscal Law