Could a 1995 Idaho ballot initiative raise the minimum wage to $6.25, eliminate the tip credit and overtime exemptions, and bring farmworkers, domestic workers, outside salespeople, and some minors under the wage law?

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 consecutive years, with the $6.25 rate beginning 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." The AG cited Pacific Merchant Shipping, Baxter, and Berry in support of its conclusion that the proposed Idaho changes would not be preempted by the FLSA.

The certificate addressed the legal validity of the proposed changes and concluded that they did not contravene state or federal statutory or constitutional law.

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.

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. The AG concluded that Idaho could enact more generous minimum-wage and maximum-workweek rules without FLSA preemption.

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. The initiative would have repealed the rule allowing employers to count those tips toward compliance with Idaho's minimum wage.

What about the overtime-exemption removal?

The opinion said Idaho had incorporated federal overtime and maximum-workweek exemptions by reference. It gave taxicab drivers as an example of a federal exemption that also applied under Idaho law. 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 or statutory impediment to repealing these exemptions.

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

No policy judgment appears in the certificate. The AG reviewed the proposed changes for statutory and constitutional impediments and found none.

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 opinion said the Idaho Minimum Wage Law set standards for wages and hours similar to the federal FLSA. It identified the Idaho minimum wage at the time as $4.25 per hour and said Idaho incorporated federal overtime exemptions.

The opinion described the FLSA as covering government employees, workers engaged in interstate commerce, and employees in certain other enterprises. It cited § 218 as preserving more generous state wage and workweek laws and discussed exemptions under §§ 203 and 213.

The AG cited Pacific Merchant Shipping, Baxter, and Berry in support of its conclusion that the FLSA did not preempt more generous Idaho wage and workweek rules.

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)
• Baxter v. M.J.B. Investors, 876 P.2d 331 (Ore. 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