Arizona Supreme Court Explains Rejection of Paid Sick Leave Challenge

The Arizona Supreme Court yesterday issued an opinion explaining its March 2017 rejection of a state constitutional challenge to Proposition 206, a ballot initiative approved by voters last November. Codified as “The Fair Wages and Healthy Families Act,” Proposition 206 increases the minimum wage incrementally and, effective July 1, 2017, requires most Arizona employers to provide paid sick days.

A cadre of business interests sued, claiming that the Proposition violated state constitution’s Revenue Source Rule, Separate Amendment Rule, and Single Subject Rule

In rejecting these arguments, the Court said that the Separate Amendment Rule only applies to proposed constitutional amendments, not to proposed statutory changes such as Proposition 206, and that the Single Subject Rule only applies to acts of the legislature, not voter initiatives.

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The Court also said the Proposition did not violate the Revenue Source Rule because a “mandatory expenditure of state revenues” only occurs when it directly causes an expenditure of state revenue. The Court held that the Proposition directly causes an expenditure of state revenue only to implement and enforce the law and that, for those activities, the law states that they shall be funded by civil penalties paid by employers.

Based on this opinion, I am deleting the Arizona case from the PSL Litigation Docket.