Court declares state law to limit minimum wage initiative illegal

The state Court of Appeals has slapped down efforts by Republican lawmakers to block local governments from mandating that private employers provide workers with even more fringe benefits than required by state law.

In a unanimous ruling Tuesday, the judges said it was clear that when voters adopted the state’s first wage law in 2006 they wanted to give local governments the power to go above and beyond the bare minimums in that initiative. And they said that includes not just wages – now $11 an hour – but also any requirement for benefits, whether that’s time off or even health insurance.

Tuesday’s ruling is a setback for the Arizona Restaurant Association and its Republican allies in the state Legislature who approved the law the appellate judges found illegal. Association lobbyists, unable to block the minimum wage law in the first place, sought to at least trim the ability of cities and counties to impose even more requirements on them.

But appellate Judge Jennifer Campbell said the Voter Protection Act in the Arizona Constitution precludes lawmakers from tinkering with what has been approved at the ballot. And she rejected as not making sense arguments by Attorney General Mark Brnovich, seeking to defend the law, that somehow when voters authorized local governments to regulate minimum wages and benefits that they really didn’t intend for that to extend to actual fringe benefits.

There was no immediate response from Brnovich on whether he will seek Supreme Court review.

But unless Tuesday’s ruling is overturned it paves the way for local governments to consider what kinds of requirements they want to put on private employers, above and beyond what already is mandated statewide.

There already have been discussions in that direction.

Regina Romero, a member of the Tucson city council, has been pushing for years to require employers in the city to offer paid parental leave.

Romero told Capitol Media Services on Tuesday that, for the moment, she is content with the city having adopted a policy of six weeks off for its own employees. She said, though, the hope is that private employers follow suit, particularly in a place like Tucson which Romero describes as a “low-wage city.”

But if they do not, Romero, who is a supporter of what she calls a “working family agenda,” said the council may have to force the issue.

It is precisely that kind of local law that the Republican-controlled Legislature sought to prevent.

Sen. J.D. Mesnard, R-Chandler, opposed both the original 2006 initiative that set the state’s first-ever minimum wage at something higher than required by federal law, and 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. More to the point, the legislation 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.”

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.