Arizona’s Preemption Law Unconstitutional, Court Rules

Arizona’s 2016 law prohibiting its political subdivisions from regulating employee benefits and “non-wage compensation,” is unconstitutional because it contradicts a 1998 law passed by voters which limits the legislature’s ability to modify voter-approved initiatives, according to a decision last week by Maricopa County Superior Court Judge Joshua D. Rogers.

The 1998 law, the Voter Protection Act, prohibits the legislature from amending or superseding a voter-approved initiative unless the proposed law “furthers the purposes” of the initiative and is approved by three-fourths of both the House and the Senate.

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In 2006, Arizona voters approved Proposition 2002, which states in part, “a county, city or town may by ordinance regulate minimum wages and benefits within its geographic boundaries” but may not reduce the minimum wage below that required by state or federal law.

Ten years later, the state passed its preemption law, which states in part: ‘The regulation of employee benefits, including nonwage compensation, paid and unpaid leave and other absences, meal breaks and rest periods, is of statewide concern. The regulation of non-wage employee benefits pursuant to this chapter and federal law is not subject to further regulation by a city, town or other political subdivision of this state.” This bill did not garner a three-quarters margin in either legislative chamber.

The court rejected the State’s claim that Proposition 202’s allowing a political subdivision to regulate wages and benefits did not contradict the preemption law’s prohibiting a political subdivision from regulating wages and benefits. The court said that these “two statutes cannot be harmonized because [the preemption statute] expressly prohibits that what [Proposition 202] expressly permits.”

Arizona voters enacted the Fair Wages and Healthy Families Act last November. It went into effect on July 1, 2017. Last week’s decision creates the possibility that an Arizona city or town or other political subdivision could enact a more generous paid sick leave law.

The State must decide whether to appeal the decision.