Arizona Court Says 2016 Law Limiting Employment Benefits Illegal

By Claire Caulfield
Howard Fischer, Capitol Media Services
Published: Wednesday, February 6, 2019 - 10:05am
Updated: Thursday, February 7, 2019 - 12:12pm

The Arizona Court of Appeals ruled lawmakers can't block local governments from requiring employers to provide additional benefits.

The ruling strikes down a 2016 law passed by the Republican-controlled Legislature and signed by Gov. Doug Ducey.

The court said Arizona voters were clear in approving a 2006 ballot measure that they wanted to give towns, cities and counties the power to go above the state’s wage and benefit requirements.

The 2016 law put that power in the state’s hands.

The United Food and Commercial Workers Union and 32 Democratic lawmakers sued and appellate court judges unanimously ruled Thursday that the bill is illegal and violates the Voter Protection Act.

An immediate effect could be paid parental leave for workers in Tucson. Regina Romero, a member of the Tucson city council, has been pushing the issue for years.

Romero told Capitol Media Services that, for the moment, she is content with the city having adopted a  six weeks policy for city employees. She hopes private employers to follow suit.

But if they do not Romero said the council may have to force the issue.

It is precisely that kind of local law, pushed by then-Rep. J.D. Mesnard, a Chandler Republican, that the Republican-controlled Legislature sought to prevent.

Mesnard opposed both the original 2006 initiative that set the state's first-ever minimum wage at something higher than required by federal law, as well as the 2016 initiative that increased it further. Employers now must pay at least $11 an hour as compared with the $7.25 figure set by Congress.

The 2016 initiative also requires employers to provide at least three days of paid personal leave. Those laws also specifically empower local governments to regulate minimum wages and benefits as long as they do not provide for a wage lower than what voters approved.

Having been approved by voters, Mesnard and his GOP colleagues are powerless to block communities from imposing their own minimum wages. But Mesnard, seeking to limit the effect of the measure, wrote a law to redefine "wages'' — the thing that the state cannot preempt because it was approved at the ballot — to include only the salaries being paid to workers.

His measure defined everything else as "nonwage compensation,'' ranging from sick pay, vacation pay and severance benefits to commissions, pension contributions and maternity leave. The legislation also dictated that local governments cannot approve any forms of "nonwage compensation'' beyond what is already required by law.

Legislative Democrats who opposed the law filed suit challenging the change.

In seeking to defend the law, Brnovich conceded that the law does allow cities to set their own minimum wages and benefits.

But he argued that the word "benefits'' somehow does not apply to things like paid time off but instead only "the advantage or privilege something gives.'' And Brnovich even suggested that the judges read the word "benefits'' — the thing the initiative says lawmakers cannot regulate — as the word "protections.''

Appellate Judge Jennifer Campbell said that is not logical, saying the state's interpretation of the statute "makes even less sense.''

And the judge rejected the whole effort by Brnovich to come up with some alternate meaning.

"Because the text of the statute is unambiguous, our statutory interpretation stops at the plain meaning of the words,'' she wrote. And using that as a test, she said the GOP-approved law is illegal.

Tuesday's ruling also means state taxpayers will pick up the tab for the private attorney hired by the Democrat lawmakers in their legal fight.

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