Arizona Update: Different Benefits in Different Cities

Employers across Arizona may soon find themselves being required to offer different benefits to employees across local boundaries, including cities and towns, as a result of an Arizona Court of Appeals decision handed down February 5, 2019.

The case, Meyer et al. v. State of Arizona, concerned an apparent conflict between the language of Proposition 202, the “Raise the Minimum Wage for Working Arizonans Act” (the “Minimum Wage Act” or WMA”), a 2006 voter proposition that empowered counties, cities, and towns to “regulate minimum wage and benefits within its geographical boundaries,” and House Bill 2579 (“H.B. 2579”), a 2016 Bill adopted by the legislature which effectively removed this power from cities, towns, and other localities.

In Arizona, voter initiatives, like the Minimum Wage Act (and Proposition 206, the Act which brought about Arizona’s new minimum wage and paid sick leave requirements) receive a special level of protection from Arizona’s Voter Protection Act, which prohibits the legislature from altering voter-approved laws unless the alteration “furthers the purposes” of voter initiatives and is passed by at least three-fourths of the members of each house of the legislature.  The Arizona Court of Appeals determined that the legislature failed to satisfy these requirements with H.B. 2579 and was therefore in violation of Voter Protection Act.

As a result, Arizona employers, include private employers, may soon find themselves being required to offer employees different benefits (including paid and unpaid leaves, meals and rest breaks, and other nonwage compensation) based upon county, city, or even town boundaries.  For example, as Jennifer Ward, the Arizona President of Employers Council, stated in an Arizona Republic article last week, the Court’s ruling could lead to Arizona cities and counties following the national trend of requiring paid family leave as a benefit to employees.

If you have questions about the Court’s ruling or any of the other topics covered in this article, contact your Employers Council representative.