Challenge to Arizona minimum wage law rejected
State Supreme Court denies bid by business groups
PHOENIX — The state’s new higher minimum wage is here to stay.
Without comment the Arizona Supreme Court late Tuesday rebuffed a bid by business groups to void the voter-approved law. The decision was unanimous.
The ruling not only leaves the current minimum at $10 an hour, up from $8.05 last year. It also means that the wages will increase until they reach $12 an hour by 2020.
After that, future increases are linked to inflation.
About 700,000 of the state’s more than 2.5 million workers are expected to benefit when the hike is fully implemented.
Proposition 206 also mandates for the first time ever that employers provide at least three days of paid leave for workers every year. Supporters of the measure said more than 900,000 Arizonans work in jobs where there is no paid leave.
Business groups led by the Arizona Chamber of Commerce and Industry argued that the measure violates a constitutional provision which says that any ballot measure that requires the state to spend more money also include a source of revenues to pay for it, such as a higher tax.
Strictly speaking, Proposition 206 exempts the state and its workers from the higher wage provisions.
But state agencies said
that there will be a cost. That because the private firms the state uses to provide things like in-home care for the medically needy were being paid based on contracts negotiated before the wage hike.
More to the point, some of the providers said they cannot pay their workers the higher wages mandated by the law unless the state coughs up some more funds.
Attorney Brett Johnson argued to the justices that is exactly the kind of spending increase for which the constitution requires a revenue source.
But the justices, questioning Johnson last week, questioned whether these were the kind of direct costs the Arizona Constitution is designed to cover. They clearly concluded they are not.
Johnson also argued there were, in fact, direct costs.
He said the Industrial Commission of Arizona, which polices state labor laws, will need to write new rules to deal with the paid leave policy. And that, he said, will require additional staffers.
If nothing else, Johnson said, the change in the minimum wage will require the commission to print up new signs that employers have to post for their workers.
That contention drew skepticism from two of the justices.
First, they said there is no evidence that the commission cannot perform those duties within its existing budget. And even if that’s not the case, they said these expenses were so minimal to not be the kind of things the constitutional mandate is designed to cover.
Chamber President Glenn Hamer said in a prepared statement he was disappointed. But he said that, if nothing else, Tuesday’s ruling puts the issue to bed and now employers know — and can plan for — their obligations.
Attorney General Mark Brnovich, who defended the initiative against the chamber’s challenge, praisede the decision.
“As attorney general, my job is to uphold the rule of law,’’ he said in a statement. And he took a slap at the business interests for trying to use constitutional arguments to kill what voters approved last November on a 58-42 margin.
“The constitution is designed to protect our rights,’’ Brnovich said. “It is not a tool to be used to undermine the will of the people.’’
Gov. Doug Ducey, who publicly opposed the wage hike, was philosophical of the ruling.
“The Supreme Court has spoken,’’ he said late Tuesday. “We’re going to follow the law.’’
The justices, who heard the arguments just a week earlier, promised a fullblown explanation of their unanimous ruling in the coming weeks. But the fact that they were able to reach consensus so quickly — and wanted to get the word out to workers — indicates they never really had any doubt about the legality of the initiative.