The 2016 election season will highlight a hot issue in labor and employment -- local regulation of minimum hourly wage rates. After recent enactments in several California cities, Arizona cities in 2017 may be following suit and enforcing their own standards. This article explores the history behind the fight in Arizona and what could lie ahead.
I. The background
The fight over local regulation of minimum wage in Arizona began over 20 years ago.[1] In 1996, Tucsonans commenced a signature drive for the Tucson Livable Wage Initiative to increase the minimum wage for the City.[2] While the effort was ultimately unsuccessful, the Arizona Legislature reacted by passing A.R.S. 23-362,[3] declaring “the establishment of a uniform minimum wage is a matter of statewide concern . . . [and] No political subdivision of the state may establish, mandate or otherwise require a minimum wage that exceeds the federal wage prescribed in 29 United States Code § 206.”[4]
In 2006, Arizona enacted Proposition 202, or the Raise the Minimum Wage for Working Arizonans Act, which established a statewide minimum wage. Importantly, the Act added A.R.S. 23-364, which states in part
The legislature may by statute raise the minimum wage established under this article, extend coverage, or increase penalties. A county, city, or town may by ordinance regulate minimum wages and benefits within its geographic boundaries but may not provide for a minimum wage lower than that prescribed in this article. (emphasis added)
The new section conflicted with A.R.S. 23-362 and was considered to have impliedly repealed it.[5] Interestingly, A.R.S. 23-364 was tagged with “Caution: 1998 Prop. 105 applies.” Proposition 105, or the Voter Protection Act, prohibits the Legislature from amending or superseding voter-approved law unless the proposed legislation “furthers the purposes” of the initiative or referendum measure and is approved by a three-fourths vote in the House of Representatives and Senate.[6]
The issue largely remained dormant until 2013, when the Legislature adopted H.B. 2280,[7] which reserved “regulation of employee benefits, including compensation” to the state. Adding A.R.S. 23-204, it states in pertinent part:
The regulation of employee benefits, including compensation, paid and unpaid leave and other absences, meal breaks and rest periods, is of statewide concern. The regulation of employee benefits pursuant to this chapter and federal law is not subject to further regulation by a city, town or other political subdivision of this state.
The Bill passed the House 32 to 27, and the Senate 17 to 11. Notably, the Bill did not contain a section indicating it satisfied Proposition 105.
As a result, citizen group The Flagstaff Living Wage Coalition filed suit arguing H.B. 2280 impermissibly wrests control over minimum wage from Arizona’s cities and towns, because it conflicted with Proposition 202 and did not meet Proposition 105’s supermajority requirement.[8] In 2015, the Coalition claimed victory and reached an agreement with the Arizona Attorney General’s office to nullify H.B. 2280.[9]
II. What does this mean going forward?
November will be an important month. In January of this year, Governor Doug Ducey called on cities “to put the brakes on ill-advised plans to create a patchwork of different wage and employment laws,” saying doing so would harm the Arizona economy.[10] However, this did little to dissuade local activists, and citizen group “Flagstaff Needs a Raise” started work on their proposal to eventually boost Flagstaff’s wage to $15 per hour by 2021. Simultaneously, The Fair Wages and Healthy Families Initiative proposed to incrementally increase the state-wide minimum wage in Arizona to $12 per hour by 2020 and require employers to provide earned paid sick time. In July, Flagstaff Needs a Raise amassed over 3,300 signatures to place Proposition 414 on the Flagstaff November ballot,[11] while the Fair Wages and Healthy Families Initiative successfully placed their initiative on the Arizona November ballot.[12]
Simultaneous initiatives, simultaneous laws. As it stands, voters in Flagstaff and the rest of Arizona will be voting concurrently on two important initiatives. If successful, employers will be required to pay extra attention as to the location of their operations. Both initiatives involve progressive wage increases over a span of years and may catch some employers out of compliance if their business involves work in both a particular city and the greater county.
Notes:
[1] See Matthew Stoloff, Minimal Change?: Implications of the “Raise the Minimum Wage for Working Arizonans Act”, 39 ARIZ. ST. L.J. 1287, (2007).
[2] See Winkle v. City of Tucson, 949 P.2d 502, 503 (Ariz. 1997).
[3] The legislation was drafted “in response to a petition which [had] been circulated in Tucson to raise the minimum wage to $7.00, with a yearly cost of living increase.” H.B. 2292, 43rd Leg., 1st Reg. Sess. (Ariz. 1997).
[4] A.R.S. § 23-362.
[5] See 2007 Ariz. Op. Atty. Gen. No. I07-002 (2007 WL 504666).
[6] Ariz. Const. art. 4, pt. 1, § 1(6)(B); see Cave Creek Unified Sch. Dist. v. Duey, 308 P.3d 1152, 1155 (Ariz. 2013)
[7] H.B. 2280, 51st Leg., 1st Reg. Sess. (Ariz. 2013).
[8] E.J. Montini, Flagstaff Group Wins Fight With State Over Minimum Wage, THE ARIZ. REPUBLIC, Jun. 30, 2015,
[9] Id.
[10] Yvonne Wingett Sanchez, Cities React to Ducey’s Ultimatum on Wage Labor Rules, THE ARIZ. REPUBLIC, Jun. 15, 2016, http://tucson.com/business/local/cities-react-to-ducey-s-ultimatum-on-wage-labor-rules/article_00241a7b-18cc-57d3-9e74-68470ba8799f.html. [back]
[11] CITY OF FLAGSTAFF, 2016 ELECTIONS, available at http://www.flagstaff.az.gov/index.aspx?NID=2105
[12] ARIZONA SECRETARY OF STATE, BALLOT MEASURE: THE FAIR WAGES AND HEALTHY FAMILIES ACT, available at http://apps.azsos.gov/election/2016/BallotMeasure/BallotMeasureList.htm
