Kansas City, Mo. (January 5, 2024)- This alert discusses the major developments in Missouri labor and employment law from the previous year, including minimum wage changes, reductions in income taxes, Wayfair Legislation, and recent Court of Appeals holdings.

Minimum Wage Rate Changes

The minimum wage rate for private businesses in Missouri increased from $12.00 per hour to $12.30 per hour. The minimum wages amount does not apply to retail and service businesses whose gross annual sales are less than $500,000. Missouri's minimum wage law also does not apply to public employers, nor does it allow the state's minimum wage rate to be lower than the federal minimum wage rate.

For more information, see the Missouri Department of Labor's minimum wage summary page.

Senate Bill 3 – Reduction in Income Tax

Senate Bill 3 dropped the state's income tax rate from 5.3% to 4.9%. The bill adds three additional potential 0.1% reductions in the top rate of tax, for an eventual rate of 4.5%. Additionally, beginning on January 1, 2023, the Act exempted the first $1,000 of a taxpayer's income from taxation. For more information regarding the Act, refer to the Bill Summary.

Wayfair Legislation and Implementation

In 2018, the U.S. Supreme Court's decision in South Dakota v. Wayfair, Inc. allowed states to adopt rules to collect sales and use taxes from businesses not physically located in their state but who sell and deliver products into the state. Missouri will be the final state to implement an economic nexus law since the Supreme Court's decision, following 49 other states and Washington D.C.

Before the Supreme Court's decision, Missouri businesses lost sales because out-of-state, online retailers were not subject to the same state sales tax laws that local businesses are. The previous system burdened Missouri businesses because they were required to remit sales and use taxes to other states, but out-of-state businesses selling to Missourians did not.

On January 1, 2023, Missouri and local jurisdictions began collecting a use tax from online retailers who sell and deliver more than $100,000 in tangible goods to consumers in the state annually.

For more information regarding the Wayfair legislation, refer to a statement by Governor Parson.

Holdings from the Appeals Court

In Crisp v. Mo. Sch. for the Deaf, No. WD85660, 2023 Mo. App. LEXIS 815, at *1 (Ct. App. Oct. 31, 2023), the Court of Appeals of Missouri held that the business judgment instruction given to the jury was proper. The business judgment rule protects the directors and officers of a corporation from liability for intra vires decisions within their authority and made in good faith, uninfluenced by any consideration other than an honest belief that the action promotes the corporation's best interest. The rule vests the directors and shareholders with wide latitude in making judgments that affect the running of the corporation. The rule precludes courts from interfering with the decisions of corporate officers and directors absent a showing of fraud, illegal conduct, an ultra vires act, or an irrational business judgment.

In J.H. v. Jefferson City Pub. Sch. Dist., 661 S.W.3d 353, 355 (Mo. Ct. App. 2023), the Court of Appeals reversed a summary judgment holding that there was a sufficient issue of fact as to whether male and female wrestlers were provided equal treatment under the same rules, and whether male wrestlers were disadvantaged and discriminated against due to their gender. According to the plaintiff, he was required to cut his hair before wrestling, whereas the female wrestler on the same team was allowed to wear a hair covering.

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