Responding to pleas from restaurant owners, Gov. Doug Ducey signed legislation Wednesday to block cities and counties from telling private employers what kind of fringe benefits they have to offer.
HB2579 is specifically aimed at preventing local laws that tell companies they have to offer things like paid vacation time and maternity leave. Chianne Hewer, lobbyist for the Arizona Restaurant and Hospitality Association, testified to lawmakers that they need to preclude local options.
But Rebekah Friend, executive director of the state AFL-CIO, said Wednesday that lawmakers — and now the governor — may have overstepped their bounds.
She says a 2006 voter-approved measure establishing a state minimum wage also covers fringe benefits and working conditions. And Friend said that law specifically allows local communities to establish standards above and beyond the minimum.
More to the point, the Arizona Constitution specifically forbids the legislature from tinkering with anything that has been approved by voters. She said this measure definitely runs afoul of it and likely will lead to a lawsuit.
Rep. J.D. Mesnard, R-Chandler, who sponsored the measure, said he believes it will survive a legal challenge. But he said that’s not certain.
“At the end of the day, as with anything, you can end up in court,” Mesnard said. “And then a judge is going to tell us the interpretation.”
At the heart of the battle are efforts by the business community to keep local governments from imposing more requirements on them than the minimum required under Arizona law.
They are powerless to block “living wage” legislation pending in Flagstaff and being considered in other communities because the 2006 initiative specifically allows cities to set wages beyond what the state requires. That figure is currently $8.05 an hour.
Mesnard is trying an end run of sorts around the measure.
His legislation seeks to limit the definition of “wages” to only the salaries being paid.
Everything else would be defined as “nonwage compensation,” ranging from sick pay, vacation pay and severance benefits to commissions and pension contributions. It also would include things like maternity leave.
Hewer told lawmakers that restaurants consider those “things they have to keep in their pocket to be competitive against that restaurant across the street.”
Mesnard said he sees it in simpler terms. He said businesses, particularly those with multiple locations, should not have to deal with “a patchwork of laws.”
That “patchwork” could be developing.
In Tucson, Councilwoman Regina Romero has pushed for an ordinance to require sick leave, saying she considers it part of a “working family agenda.” Romero said about half of Tucson workers do not have access to earned sick leave.
Romero said she may have to start smaller, perhaps adding a sick leave requirement to an existing Tucson ordinance that requires contractors who do business with the city to pay a “living wage.”
Tempe has considered the issue of paid sick leave but proponents backed off after stiff business opposition.
HB 2579, if upheld by the courts, would short-circuit such moves.
The legislation has divided lawmakers largely along party lines.
Sen. Sylvia Allen, R-Snowflake, said during debate that it’s necessary for lawmakers to step in to help those who “have put everything on the line” to open a business.” But Allen said there’s also a philosophical issue at work here.
“This is not the role of government to tell businesses what they should be paying their employees,” she said.
Sen. Steve Farley, D-Tucson, acknowledged that letting cities decide things like mandatory sick leave could result in disparate rules around the state. But he does not see that as a problem.
“If businesses decide that the cost of business is too much in that municipality or that county, they can feel free not to do business in that municipality or county,” Farley said.
Voters could get to weigh in on at least part of the issue in November.
Initiative petitions are being circulated to boost the state minimum wage to $12 an hour by 2020, far more than it would be under existing law which requires annual inflationary increases to the current $8.05 an hour. But the measure goes farther than the 2006 law, requiring employers to provide at least three days of paid sick time a year to workers, with five days for companies with more than 15 workers.
Backers have to gather more than 150,000 valid signatures by July 7 to qualify for the ballot.