By Amanda Lubinski & Kellie Houx
Local biz leaders say change will have significant impact on their businesses
In November, voters approved Proposition A, a ballot measure that increased the state’s minimum wage and requires employers to provide paid sick leave to employees. With the measure in effect as of Jan. 1, the Gladstone Dispatch is reviewing what employees need to know and what local business leaders have to say about how their businesses will be impacted.
Key points about Prop A
The minimum wage increased to $13.75 per hour on Jan. 1 and will continue increasing $1.25 per hour each year until 2026, when it will be $15.00 per hour.
The minimum wage will be adjusted based on inflation each January beginning in 2027. The law exempts governmental entities, political subdivisions, school districts and education institutions from the minimum wage increase.
Proposition A also requires all employers to provide one hour of paid sick leave for every 30 hours worked. For businesses with more than 15 employees, employees may use up to 56 hours of paid sick leave per year. For businesses with less than 15 employees, employees may use up to 40 hours per year.
Employees will start accruing paid sick time on May 1, 2025, and employers must provide written notice of the paid sick time by April 15.
“Employers must allow employees to carry over up to 80 hours of earned, but unused, sick time from year to year,” reports the state chamber of commerce regarding Prop A. “Employers are allowed to frontload sick leave, or provide all paid sick time that an employee is expected to accrue over the course of the year at the beginning of the year.”
What chambers of commerce leaders are saying
The Missouri Grocers Association, Missouri Restaurant Association, National Federation of Independent Business, Inc., Missouri Forest Product Association and Missouri Chamber of Commerce and Industry filed a lawsuit this month seeking to overturn the results of the Prop A vote.
“Election irregularities and the constitutional violations are so significant that the election results must be overturned and Proposition A must be declared invalid,” reads the lawsuit filing.
Nearly 3 million voters voted in favor of Prop A.
The suit also claims the fiscal note and summary statement for Prop A were “insufficient and unfair” and that the proposition contained “multiple subjects in violation of the single subject clause of the Missouri Constitution.”
“We are committed to protecting the interests of Missouri’s business community and this lawsuit is a crucial step in addressing concerns about the impact of this measure,” wrote Tammy Long, the state chamber’s vice president of programs and business services in an email to local chamber of commerce leaders.
The state chamber of commerce publicly opposed Prop A ahead of the election by releasing a letter to the editor to media groups around the state, including the Courier-Tribune. The full language of Prop A can be found on the Missouri Secretary of State’s website.
“This anti-democratic move is reprehensible,” Missouri League of Women Voters President Marilyn McLeod told Kansas City area media outlets in a release about the lawsuit.
Kearney Chamber of Commerce Executive Director Stacie Bratcher said she and the Kearney chamber’s ambassadors have been discussing the implementation of Prop A and its impacts on local businesses.
“They all felt Prop A would have a tremendously negative impact on their businesses. Respondents included a small one-man shop, two successful medium-sized organizations and an HR specialist. Both the increased minimum wage and the required paid sick leave are causing multiple issues, added expense is just the tip of the iceberg,” she told the Dispatch. “Prop A was presented as a one-size-fits-all solution so the impact will be different for each business as they work to conform their corporate structure. Because most citizens don’t fully understand the proposition, it is damaging corporate cultures and employee/employer relationships if the employer doesn’t respond as the employee thought they should.”
Another issue with Prop A Bratcher noted is that “employees who make more than $15 an hour think this should be increasing their salary equally.”
“Vacation and PTO have to be reevaluated. Employers are being forced to recategorize some of their exempt and non-exempt staff, which is negatively impacting work schedules and productivity for both sides. It’s a headache for those working on commission. It is also causing employers to pour time and energy into rewriting policies and handbooks. This is the proverbial monkey wrench. But, I have no doubt our business will adjust and overcome, just as they always do,” she said.
Like Bratcher, Liberty Chamber of Commerce President Gayle Potter said the Liberty chamber recognizes businesses in the city will be significantly impacted by Prop A taking effect.
“Specifically, businesses may experience changes in their compliance requirements, tax structures or operating procedures, depending on the specifics of the measure. For some, this could mean increased costs or administrative adjustments,” she said.
As in Kearney, some Liberty business owners, Potter said, have expressed concerns about potential increases in operational costs associated with Prop A.
“Others seek clarity on specific provisions within Prop A and how they align with existing practices. We’re working to gather feedback from our members to better understand and address their concerns,” she said. “We’ll provide resources to help our businesses navigate the changes. As always, we aim to ensure our members have access to the tools and information they need to succeed.”
Amy Harlin, president of the Gladstone Chamber of Commerce told the Dispatch her chamber and its members have expressed similar concerns to those in other cities.
“The mandated sick leave is causing HR headaches as it forces more paperwork/policies to track vacation/PTO/ time off,” she said. “Also mentioned when visiting with members in the ‘trickle-down’ effect as longer-tenured employees feel that they should have their salaries increased to align with the increases to entry-level minimum wage.
What business leaders are saying
Ed Hughes, owner of the Northland Rolladium in Liberty, is the only full-time employee at his business. He has four part-time adult employees who serve as managers as well as 10 part-time high school student employees.
“I don’t mind paying a good wage,” he said. “I know that I am often a first-time employer for the high school students. I often see myself as an incubator. I’m not an employer, I’m an educator.”
Being an educator includes getting the community to understand that prices go up as wages increase.
“There’s really no end in sight,” he said. “Our customers, simply put, will pay more.”
Hughes said since the pandemic, he has had to adjust prices at least twice a year. The Rolladium includes a full snack bar with a variety of candies, hot dogs and drinks.
“I look at costs in January and then again at the end of the summer,” he explained. “I get increases from Pepsi for the syrup and ICEE. I have to pay for those if I want to have the items that appeal to the skaters. It’s a never-ending cycle. Then I have to balance an increase in wages.”
Dan and Sarah Ulledahl, who own Chop’s BBQ & Catering in Smithville, will be working to figure out how to staff the restaurant, bring in customers on a regular basis and keep costs palatable with coming state minimum pay changes.
“When people think about minimum wage, they think about the bigger chains like McDonald’s and Taco Bell,” Sarah said. “They don’t think about the smaller businesses that still have people answering the phones or responding to emails. It’s not an electronic kiosk to place the orders. I believe the increase is going to be hard on any business.”
Like Hughes, the Ulledahls strive to pay their staff accordingly, but now the minimum wage going up will create struggle.
“I want to pay a solid wage. I think it’s going to be hard to go up from $15 and sick leave,” she said.
The Ulledahls have 17 part-time employees with many being high school students.
“I want them to know that school takes precedence,” Sarah said. “If they want to go to homecoming or prom, we need to have extra employees.”
