State lawmakers cannot block local governments from mandating that private employers provide workers with even more fringe benefits than required in law, the Arizona Supreme Court has ruled.
In a brief order August 28, the justices refused to disturb a decision by the state Court of Appeals which concluded that when voters adopted the first minimum wage law in 2006 they wanted to give local governments the power to go above and beyond the bare minimums of that initiative. And that, the appellate judge said, includes not just wages – now $11 an hour – but also any requirements for benefits, whether that’s time off or even health insurance.
The decision 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.
It also is a setback for the Arizona Restaurant Association and its Republican allies in the state Legislature who sought the curbs.
At the root of the fight is the original 2006 initiative that set a state minimum wage at a figure higher than the $7.25 required under federal law. A decade later, voters approved another increase to $10 an hour, a figure that is set to go automatically to $12 next year, along with a provision for employers to provide at least three days of paid personal leave.
Both the 2006 and 2016 measures 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.
Because both measures were approved by voters, lawmakers were powerless to preclude the kind of higher wages already instituted in Flagstaff.
But GOP lawmakers, seeking to limit the effect of the measure, wrote a separate law in 2016 to redefine “wages” – the thing the state cannot preempt because it was approved at the ballot – to include only the salaries being paid to workers.
The legislation then 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.
In seeking to defend the 2016 law, Attorney General Mark Brnovich conceded that what voters approved 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.”
Appellate Judge Jennifer Campbell wrote 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.
The August 28 ruling does more than preserve the right of cities to set fringe benefit standards. It also means state taxpayers will pick up the tab for the private attorney hired by the Democrat lawmakers in their legal fight.