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Superior Court judge refuses to block minimum wage hike

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Saying there are no constitutional violations, a judge on Wednesday refused to block the voter-approved law that requires employers to pay their workers at least $10 an hour beginning Jan. 1.

In a setback for business interests, Maricopa County Superior Court Judge Daniel Kiley rebuffed their arguments that Proposition 206 legally should have been split into two separate measures, one to raise the hourly wage in steps — it eventually would hit $12 by 2020 — and the other to require that employers give workers at least three days of paid personal leave.

The judge said requirements for separate ballot measures applies only to constitutional provisions. By contrast, Proposition 206 simply amends statute.

And Kiley said even if that were not the case, both the idea of raising wages and providing paid time off are sufficiently interrelated to the “minimum conditions of employment.”

Kiley also said there was no merit to the claim the initiative violates a constitutional provision which requires any voter-approved measure to have a dedicated source of revenues to cover any costs to the state.

There is no direct hit to the state, as its employees are exempt from the initiative. But officials of the Arizona Health Care Containment System, the state’s Medicaid program, contend the agency is required by federal law to maintain an adequate network of private contractors for nursing home and in-home care.

Several contractors who now pay workers less than $10 an hour have said they may be forced out of business without additional state dollars. And AHCCCS officials say the only way to keep that from happening is to raise their reimbursement rates.

But Kiley said nothing in the initiative actually forces AHCCCS to increase what it pays its contractors. Anyway, he pointed out that both Arizona law and the contracts with Medicaid spell out that the state does not have to spend money it does not have.

The judge acknowledged that allowing the new minimum wage to take effect might cause some hardship on the state and the contractors who may have to lay off workers. But he said it would be even more unfair to those at the bottom of the pay scale — those who can now be paid as little as $8.05 an hour — to block even temporarily the higher wages from kicking in as scheduled.

“Granting the plaintiffs’ requested relief would delay the pay raise promised to low-wage employees, many of whom struggle on a daily basis to make ends meet,” the judge wrote. “In the court’s view, delaying the promised pay raise would impose a significant hardship on low-wage workers that could not be fully remedied by the payment of back wages at some point in the future if the preliminary injunction were later vacated.”

Kiley’s ruling is unlikely the last word.

Business interests led by the Arizona Chamber of Commerce and Industry and the owners of the Valle Luna restaurant chain still can ask the state Supreme Court to intercede between now and the end of the year. Chamber spokesman Garrick Taylor said options are being discussed with attorneys.

And regardless of whether an injunction is issued and the wages go up on Jan. 1, foes still can challenge the law at a full-blown trial that would not likely occur for months.

“We still believe in the merits of the arguments we presented,” Taylor said Wednesday. “We are troubled by the constitutionality of Proposition 206.”

Tomas Robles, who chairs the group that pushed the initiative, said while he is pleased with Wednesday’s ruling he is dismayed by the prospect of months of new legal battles.

“I’m very disgusted and ashamed of the Arizona Chamber and the Valle Luna restaurants and anyone who claims to care about Arizona families,” he said. “They are trying to ruin a lot of the hope that a lot of families are going to have for next year right around the holidays.”

And Robles said there’s something else about the legal challenge.

“It’s kind of funny how businesses don’t have money to pay workers supposedly from the chamber’s point of view but they have hundreds of thousands of dollars for legal fees,” he said.

But there is much more at stake than the amount being spent on lawyers.

Robles said during the campaign that about 770,000 Arizona workers are currently being paid less than $10 an hour.

Even assuming a current wage of $9, that means at least a dollar an hour raise. Multiply that by the number of hours a year for a full-time worker and the difference comes out to more than $1.4 billion.

Robles acknowledged the higher costs for businesses.

“But they’re also going to reap the reward of people will be able to spend that money at their businesses, like we’ve seen at other places” where the minimum wage has been hiked.

The ruling also is a setback for Gov. Doug Ducey, who opposed the initiative and whose agencies like AHCCCS provided evidence used by lawyers to challenge the initiative. His only comment to Wednesday’s ruling, through press aide Daniel Scarpinato, is that the state “will continue to follow the law.”

This is actually the second legal defeat for business interests on the issue.

Earlier this year the Arizona Restaurant Association sought to keep the issue from even getting to the ballot, presenting evidence that many of the people circulating the petitions had not complied with the requirements of state law. That includes registering with the secretary of state’s office, not having been convicted of felonies, and providing an Arizona address where they could be contacted if necessary.

Maricopa County Superior Court Judge Joshua Rogers agreed, saying that based on those requirements he would have thrown out “a score” of petitions circulated by those people potentially leaving initiative backers with insufficient signatures. But Rogers ruled foes missed the deadline to challenge the petitions, voiding all their claims and clearing the way for the measure to get on the ballot.

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