PHOENIX — State lawmakers cannot block local governments from mandating that private employers provide workers with more fringe benefits than required in state law, the Arizona Supreme Court has ruled.
In a brief order Wednesday, the justices refused to disturb a decision by the state Court of Appeals, which concluded that when voters adopted the state’s first minimum-wage law in 2006, they wanted to give local governments the power to go above and beyond the bare minimums of that initiative.
The appellate judge said that includes not just wages — now $11 an hour — but also any requirements for benefits, whether that’s time off or health insurance.
Wednesday’s decision paves the way for local governments to consider requirements they want to put on private employers, above and beyond what is mandated statewide.
It also is a setback for the Arizona Restaurant Association and its Republican allies in the state Legislature who sought the curbs.
The original 2006 initiative set a state minimum wage at a figure higher than the $7.25 required under federal law. A decade later, voters approved another increase to $10 an hour, a figure that is set to go automatically to $12 next year, along with a provision for employers to provide at least three days of paid personal leave.
Both the 2006 and 2016 measures also specifically empower local governments to regulate minimum wages and benefits as long as they do not provide for a wage lower than what voters approved.
Because both measures were approved by voters, lawmakers were powerless to preclude the kind of higher wages already instituted in Flagstaff.
But GOP lawmakers, seeking to limit the effect of the measure, wrote a separate law in 2016 to redefine “wages” to include only the salaries being paid to workers.
The legislation then defined everything else as “nonwage compensation,” ranging from sick pay, vacation pay and severance benefits to commissions, pension contributions and maternity leave. The legislation dictated that local governments cannot approve any forms of “nonwage compensation” beyond what is already required by law.
In seeking to defend the 2016 law, Attorney General Mark Brnovich argued that the word “benefits” does not apply to things like paid time off but instead only “the advantage or privilege something gives.” Brnovich suggested that the judges read the word “benefits” as the word “protections.”
Appellate Judge Jennifer Campbell wrote that is not logical, saying the state’s interpretation of the statute “makes even less sense.” The judge rejected the effort by Brnovich to come up with some alternate meaning.
“Because the text of the statute is unambiguous, our statutory interpretation stops at the plain meaning of the words,” she wrote. And using that as a test, she said the GOP-approved law is illegal.
