Search form

Arizona’s Voter-Approved Minimum Wage, Paid Sick Leave Law Constitutional, State High Court Affirms

By Jeffrey W. Toppel and Stephanie M. Cerasano
  • March 16, 2017

In a much-anticipated decision, the Arizona Supreme Court has unanimously ruled to uphold Proposition 206, the November 2016 ballot initiative that increases the Arizona minimum wage and requires employers in the state to offer paid sick leave to employees.

Chief Justice Scott Bales stated in the March 14 order that the seven-member court unanimously rejected the plaintiffs’ arguments on the law’s constitutionality. He further stated that a detailed explanation of the Arizona Supreme Court’s reasoning will be provided later.

Prop 206 raised the minimum wage for Arizona employees to $10.00 per hour beginning January 1, 2017, and provides for incremental increases to a minimum wage of $12.00 per hour by 2020. Additionally, effective July 1, 2017, the law requires employers to provide paid sick leave to Arizona employees.

In December 2016, a group of business organizations led by the Arizona Chamber of Commerce and Industry filed a lawsuit challenging the law’s constitutionality under two separate theories. First, they pointed to the “Separate Amendment Rule,” which mandates that any proposed amendment to the Arizona constitution be limited to related matters of substance. They argued that Prop 206 addressed the two distinctly unrelated subjects of minimum wage and paid sick leave. Additionally, they claimed Prop 206 created new costs to the state’s general fund without providing a new revenue source, in contravention of the Arizona Constitution’s requirement that bills increasing state expenditures identify a specific revenue source. Principally, the plaintiffs argued that while the state was exempt from the minimum wage requirement, vendors providing goods and services to the state were required to pay the higher wage, thereby increasing costs to the state.

In December, a judge on the Maricopa County Superior Court denied the plaintiffs’ request to enjoin the minimum wage requirements from taking effect on January 1, 2017. Following the court’s denial, the plaintiffs filed a special action with the Arizona Supreme Court, which quickly agreed to hear the appeal. On March 14, the Arizona Supreme Court rejected the plaintiffs’ claims without issuing an opinion.

Many Arizona employers were waiting patiently for the Supreme Court’s decision before developing policies to comply with the Prop 206’s new paid sick leave requirements. Following the Court’s decision, employers should begin to prepare for the upcoming July 1, 2017, date for implementation of these new requirements.

While the Industrial Commission of Arizona has issued a series of updated Frequently Asked Questions (“FAQs”) regarding Prop 206’s requirements, questions remain. In the coming months, the Industrial Commission may promulgate regulations and additional guidance.

Jackson Lewis will continue to provide updates on these significant new requirements for Arizona employers.

©2017 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

Reproduction of this material in whole or in part is prohibited without the express prior written consent of Jackson Lewis P.C., a law firm that built its reputation on providing workplace law representation to management. Founded in 1958, the firm has grown to more than 900 attorneys in major cities nationwide serving clients across a wide range of practices and industries including government relations, healthcare and sports law. More information about Jackson Lewis can be found at www.jacksonlewis.com.

See AllRelated Articles You May Like

October 21, 2019

FMCSA Clearinghouse Opened, Transportation Department Announces

October 21, 2019

The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) Clearinghouse registration, which is the electronic database that will contain information about commercial motor vehicle drivers’ drug and alcohol program violations, is open, the agency has announced. The Clearinghouse will become operational on... Read More

October 8, 2019

DOL Proposes FLSA Regulations to Close Door on ‘80/20’ Rule, Implement Tip Pooling Amendments

October 8, 2019

The Department of Labor (DOL) published a Notice of Proposed Rulemaking (NPRM) on October 8, 2019, to eliminate the “20% Rule,” or “80/20 Rule,” under the Fair Labor Standards Act (FLSA). The 20% Rule, which first appeared in a DOL Field Operations Handbook (FOH) in 1988, requires employers to pay tipped employees the full minimum... Read More

October 7, 2019

No California Waiting-Time, Inaccurate Wage Statement Penalties Based on Unpaid Meal Period Premiums, Court Rules

October 7, 2019

Do meal period premiums trigger derivative liability for waiting-time penalties and inaccurate wage statements? The California Court of Appeal has ruled in the negative on the oft-asked question. Naranjo et al. v. Spectrum Security Services, Inc., No. B256232 (Cal. Ct. App. Sept. 26, 2019). The Court ruled that actions to recover... Read More