Court Battles

Business groups challenge Arizona minimum wage hike in court

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Business and industry groups are challenging a proposition Arizona voters approved in November that would raise the state’s minimum wage to $12 an hour, alleging the measure violates the state constitution.

Fifty-eight percent of Arizona voters cast ballots in favor of Proposition 206, which would raise the state minimum wage to $10 in 2017, and then incrementally to $12 by 2020. The measure also requires employers to give their workers 24 to 40 hours of paid sick leave every year, depending on the size of the company.

But in a lawsuit filed in Maricopa County Superior Court, the Arizona Chamber of Commerce and Industry and the Greater Phoenix Chamber of Commerce said the wage hike violates Arizona’s constitution because it creates new costs to the state without paying for them.

The wage hike does not apply to state workers. But the suit says the state will have to pay more for contractors who are covered under the increase, thus burdening the state’s general fund.

{mosads}“The organized-labor-affiliated backers of Proposition 206 sloppily constructed their initiative to exempt state employees, yet failed to properly account for those employers who hold state contracts. This failure is poised to a blow a giant hole in the state budget,” Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry, said in a statement.

A Maricopa County Superior Court judge set the first hearing in the case for Tuesday.

Plaintiffs cited companies that provide services to those with developmental disabilities, which will have to pay their employees more once the wage hike goes into effect. Arizona officials said last Thursday they would give those contractors more money to cover costs, the Arizona Republic reported.

“By not following the Revenue Source Rule, the backers of Proposition 206 are harming the state’s most vulnerable individuals and those who work to serve them,” wrote the Greater Phoenix Chamber of Commerce.

The chambers, suing on behalf of a handful of individuals, corporations and other business groups, said the proposition also violates a rule requiring ballot measures to stick to a single subject. By including both a wage hike and paid sick leave, plaintiffs say the proposition runs afoul of another provision of the state constitution.

Arizona was one of four states that voted to raise the minimum wage in November. Colorado and Maine voters adopted similar plans to raise the wage to $12 an hour, while Washington State voters hiked the lowest hourly wage to $13.50.


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