State Supreme Court deems Prop A election results valid

Kara Corches: State chamber of commerce seeks passage of HB 567.

Tiffani Claussen: Paid sick leave law is a challenge from an administrative standpoint.

Sara Choate: Some businesses have likely not yet addressed law change.

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What’s next for employers?

Sara Choate, managing director of Human Capital Solutions at KPM CPAs & Advisors, estimates the firm has worked with “dozens and dozens” of business clients on either creating or amending paid sick leave policies following the November passage of Proposition A.

While declining to weigh in on the Missouri Supreme Court decision that resulted in the paid sick leave law taking effect May 1, Choate said the court waiting until late April to render its opinion was no surprise.

“I’m not shocked that it came down to the wire,” she said. “They obviously did what we want them to do in terms of listening to both sides of the argument and coming to a decision. They delivered that.”

As part of the new law, employers were required to provide written notice to employees of the paid sick time policy by April 15.

Employers with fewer than 15 employees must allow workers to earn at least 40 hours of paid sick leave per year, with larger employers mandated to allow at least 56 hours. Prop A also raised the state’s minimum wage to $13.75 per hour as of Jan. 1, up from $12.30 per hour. It then increases the minimum wage to $15 per hour in 2026, which will again be adjusted each January based on the consumer price index.

Choate said most of the firm’s work with clients on the sick leave policy has been this year, although she added some wanted to be very proactive and get to work immediately after Prop A passed. Others who already had existing paid sick leave in place might only have needed tweaks to the policy wording.

“We have to take personal thoughts and opinions out of it and just deal with the facts,” she said. “So really, it’s been a lot of looking at your existing policy. Where are you today? Where do you need to go? What are we going to have to do to get you there?”

Although some companies might believe their policy is already generous and are fine with how it’s written, Choate suggests they take a second look.

“Honestly, every company, regardless of how robust and generous your policy is, really needs to look at your policy and make sure that it’s hitting all of the marks because there are so many nuances to the law,” she said.

If legislators pass House Bill 567 – currently up for debate in the Senate – the resulting repeal of the sick leave requirement, if signed by Gov. Mike Kehoe, wouldn’t go into effect until Aug. 28, Choate said.

Employers should still proceed with the current sick leave law in place as of May 1, she said.

“There may be a weird limbo period where we still have to go with what is the law as of today, and then maybe if that changes effective Aug. 28, maybe some policies can be modified a little bit if that’s what’s best for the company and best for everybody,” she said.

Despite all the Prop A news in recent months, Choate also expects some businesses are yet to address the sick leave policy.

“Over the next couple months, there will be people come out of the woodwork that this will be new information to them somehow,” she said.

Mandatory paid sick leave took effect May 1 at Missouri businesses after the state Supreme Court ruled that election results are valid for Proposition A. The decision – made just two days before the law took effect – came after months of uncertainty for business leaders on the status of the law.

The court’s decision was unanimous, although Judge Robin Ransom dissented in a separate opinion that she does not believe the court has jurisdiction over postelection ballot title challenges.

“This court finds there was no election irregularity and the election results are valid,” Chief Justice Mary Russell wrote in the opinion.

Proposition A, which passed with roughly 57.6% of the vote in November, mandates employees be given one hour of paid sick leave for every 30 hours worked, with enforcement and oversight by the Missouri Department of Labor and Industrial Relations. Governmental entities, political subdivisions, school districts, educational institutions and those who work at businesses with less than $500,000 in annual revenue are among exemptions, according to the secretary of state’s office.

The law applies to all eligible employees, whether they work full or part time.

The passage of Prop A also approved increases to the state’s minimum wage.

The lawsuit challenging the constitutionality of the minimum wage and required paid sick leave law was filed in December by the Missouri Chamber of Commerce and Industry, the Missouri Restaurant Association, Associated Industries of Missouri, the Missouri Grocers Association, the National Federation of Independent Business and the Missouri Forest Product Association. The Springfield Area Chamber of Commerce also supported the plaintiffs’ efforts.

The plaintiffs sought to overturn the voter-approved law based on allegations that the proposition violated the state constitution. The plaintiffs asserted ballot initiatives must cover a single subject – Prop A covered minimum wage and paid sick leave – and claimed the ballot summary was misleading and insufficient.

The state Supreme Court heard arguments in the case in March.

Officials with Missourians for Healthy Families and Fair Wages, which led the Proposition A campaign, argued that minimum wage and paid sick leave fell under the single subject of paid compensation.

In the court’s opinion, Russell wrote, “Because the court lacks original jurisdiction over contestants’ arguments relating to Proposition A’s validity, those counts are dismissed without prejudice.”

Russell also wrote that the ballot language on sick leave accurately and impartially informed voters that the issue would require employers to provide one hour of sick leave to employees for every 30 hours worked; allow oversight and enforcement; and exempt governmental entities.

Missouri Chamber of Commerce and Industry President Kara Corches said in an April 29 emailed statement to Springfield Business Journal that the organization is “deeply disappointed” by the Supreme Court decision.

“While we respect the court’s authority, we believe today’s decision fails to address critical concerns regarding election irregularities and constitutional violations that occurred,” she said.

Laurie Knowlton, who owns Rountree neighborhood business Pickwick Underground Framing LLC, said via email she was “thrilled” with the Supreme Court decision. She is among roughly 500 businesses statewide that supported Proposition A as part of Missouri Business for a Healthy Economy, a coalition of business leaders and executives.

“I was an early supporter of Proposition A because I value my employees and know that when you take care of them, they stay longer and take good care of your customers,” she said. “That’s the key to sustaining a successful small business for 25 years. Employees provide the quality and professional service that produces repeat customers. I am happy to see small businesses like mine are showing strong business support for Proposition A. These voices are important in demonstrating that Proposition A benefits both workers and businesses alike.”

Implementation time
It’s been a several months’ process to alter the paid sick leave policy for Strafford-based Amprod LLC, said CEO Tiffani Claussen. The company employs over 400 people with divisions including American Products, DustShield, EnSight Solutions and Watson Metal Masters.

Claussen credits the company’s human resources department for its work with outside counsel Kutak Rock LLP to make sure the plan aligns with the new law.

“We had to do a lot of work to learn all the nuances to set up the new sick time pay appropriately,” she said, adding officials were waiting for the Supreme Court decision before implementing the policy. “We’re now in the period of going through and educating our team members.”

The company’s HR employees participated in multiple webinars to learn about the law and vetting information such as how the time is earned, how it can be used and rolled over annually, while making sure it will be properly tracked and documented.

Claussen said she expects there will be an employee feedback period to garner any concerns or questions to help fine-tune the policy.

“It’s definitely a challenge from an administrative standpoint,” she said, adding a May 1 implementation date for benefits that typically run January-December adds complexity. “We believe that we need to provide time off for our employees and make sure that they’re well taken care of, and we’ve always strived to do that. This just adds another administrative burden to it.”

Legislative wrangling
While the court has weighed in, the issue is still being debated in Jefferson City. Through House Bill 567, state legislators are seeking to repeal the sick leave requirement and keep the minimum wage from being annually adjusted in line with inflation in the future.

Because Prop A changed state law and not the constitution, the legislature can modify or overturn it without voter approval, according to the secretary of state’s office.

The bill, which was passed in March by the House of Representatives in a 96-51 vote, is yet to receive a vote on the Senate floor as Democrats have been blocking Republican efforts to overturn the law, according to media reports. This year’s session ends May 16.

Corches, of the state chamber, said it’s imperative that the General Assembly pass HB 567.

“This bill will provide much-needed clarity for business owners struggling with the onerous paid sick leave requirements and give employers the flexibility to tailor workplace policies to meet the needs of their workforce,” she said.

Matt Morrow, Springfield Area Chamber of Commerce president and CEO, said via email that provisions of Prop A – specifically how employers can confidently comply with the mandated paid sick leave – remain a top concern shared by members and the broader business community.

“We, along with many other organizations across the state, were hopeful that judicial action would alleviate the confusing and burdensome requirements for employers prior to May 1,” he said. “Although we did not receive this ruling, we are committed to strongly advocating for a swift state legislative fix to both alleviate concerns and clarify the many questions from businesses that, unfortunately, remain unanswered with the current statutory language.”