September 2, 2016

California-Style Labor Laws Could Appear on Arizona’s Ballot

By AnnaMarie Knorr

The unions have not been shy in taking advantage of Arizona’s low threshold to refer laws to the ballot.  In 2006, they created Arizona’s first minimum wage law through the initiative process.  Ten years later, they are at it again.

The Fair Wages and Healthy Families Initiative, as filed by the unions, would increase the minimum wage in Arizona to $10 in 2017 then gradually to $12 by 2020.  And then, beginning in 2020, Arizona’s existing annual inflation index would return to ensure the wage rate increases every year.  The initiative language also provides 40 hours annual “earned paid sick time” for employees of large employers (more than 15 employees) and 24 hours for those of small employers (15 or less employees).  The initiative states that time accrues at one hour earned for every 30 hours worked, and it is still unknown if employees who work overtime can accrue paid sick leave hours in excess of the 24 and 40 hours mandated in the initiative language.

The proposal also stipulates that time may be used to address circumstances caused by illness of employee or employee’s family, public health emergencies, or domestic violence.  It prohibits retaliating against employees using the benefit, and exempts employees participating in a collective bargaining agreement.  The language also provides for counties, cities and municipalities to set their own wage and hour regulations above the requirements in the initiative.  Under current law, wage and hour regulations are subject to state preemption.  In anticipation of the state initiative passing, the city of Flagstaff has a local initiative being circulated to raise the minimum wage to $15 per hour.

The initiative was originally filed this spring, after months of negotiations with the Arizona Restaurant Association (ARA) on a legislative referendum to raise the minimum wage in exchange for a preferred tip credit calculation were unsuccessful.  Western Growers supported an effort by ARA to block the union signature gathering efforts, but it was unsuccessful and they filed 270,000 signatures to put the minimum wage and paid sick leave initiative on the November 2016 Ballot.  The threshold to qualify for the ballot was 152,000.  After an initial review, the secretary of state threw out over 30,000 signatures.  With 240,000 valid signatures left, counties are now required to sample check the signatures and report back to the secretary of state’s office.

Much to the credit of the ARA, they have continued the fight into the court system where they are challenging the validity of signatures that were submitted.  State law in Arizona requires that a signature gatherer register to collect petition signatures with the secretary of state.  They must also be eligible to vote in Arizona, which means over the age of 18, no felony record and a legal citizen.

The hearing to dismiss signatures collected illegally was successful in getting several petition gatherers deemed ineligible to collect signatures.  How many signatures are invalidated remains to be seen and the fate of the initiative will be determined by the courts and the signature validation rates that will be established by the counties.  However, should it qualify, the state and local chambers of commerce, business organizations and industry will have to step up their efforts to defeat the measure in November.

If the legal challenge is successful and the minimum wage and paid sick leave initiative is removed from the ballot, it will be a temporary victory for businesses in Arizona.

A separate initiative capping hospital executive pay is also on the ballot in Arizona as a result of union frustration.  It is clear that the unions have found their way into Arizona politics via the initiative process.  Should they be successful at the ballot box, how long will it be until they focus their efforts at the candidate races?