Suit Claims Preemption Law Is Illegal
If an activist group has its way, cities across Arizona would be allowed to raise the minimum wage within their borders. A 2006 voter initiative, known as both Proposition 202 and the Raise the Arizona Minimum Wage for Working Arizonans Act, explicitly granted municipalities the right to increase local wage floors. In 2013, Gov. Jan Brewer signed House Bill 2280, which reserved for the state “regulation of employee benefits, including compensation,” banning cities from increases minimum wages across the state. According to a lawsuit filed by the Flagstaff Living Wage Coalition, HB2280 violated an older voter initiative, the Voter Protection Act of 1998, which requires the state legislature to reach a three-fourths supermajority in order to modify or cancel any voter-approved referendum. HB2280 only passed with 56 percent of lawmakers voting Aye. Although none of Arizona’s cities implemented minimum wages during the years in which they were allowed, several cities in other states have done so, including San Francisco and Chicago. Progressives in New York City and elsewhere are pushing for the authority to increase the local minimum wage.
What Happens Next
According to the case’s docket entry, both the state’s Speaker of the House and President of the Senate have been served regarding the case, and the state has until May 15 to respond. Either party could file an appeal to a future decision, so a definitive ruling is not anticipated in the immediate future.
What This Means For Small Business
If the courts eventually overturn HB2280, small businesses would face the prospect of having to comply with a confusing set of wage regulations, which would make it harder to do business in the state. “Many employers operate in multiple jurisdictions. Having a patchwork of different employment laws is a real impediment to successful economic development. It would make it really hard for Arizona to be attractive to out-of-state entrepreneurs trying to set up a new operation here,” warned NFIB State Director Farrell Quinlan. Any increase in the local minimum wage would increase the cost of each full-time equivalent position by thousands of dollars and give a competitive advantage to companies located just outside of city limits. Increases could be effected through city council votes or ballot initiatives. Shawn Aiken, one of the two lead attorneys behind the challenge, named Phoenix as one of the cities where activism for a minimum wage hike has been strongest. “We want to get it on ballots as soon as we can get this lawsuit resolved,” said Aiken. The statewide minimum wage is currently $8.05 per hour.
Additional Reading
Other news media outlets covering the lawsuit include the Eastern Arizona Courier, Northern Arizona Today, and KJZZ-FM. The Arizona Republic carries statements from both Quinlan and Aiken.
