Arizona Chamber of Commerce and Industry, the Tucson Hispanic Chamber of Commerce, the Greater Phoenix Chamber of Commerce, and two employees of the Valle Luna restaurant chain have sued the State of Arizona, the Industrial Commission of Arizona, Arizona Health Care Cost Containment System, Arizona Department of Administration, and the Arizona State Procurement Office to block the minimum wage increase.
The chambers of commerce oppose the voter approved Fair Wages and Healthy Families Act, which mandates raising the minimum wage to $10 in 2017, and then incrementally to $12 by 2020, and creating a right to paid sick time off from employment.
Prior to its passage, opponents of Prop 206 argue that Arizona’s minimum wage law already allows for annual hourly wage increases that are far above the federal minimum wage. They noted that the minimum wage laws have negative economic consequences and often hurt those most that they are intended to help.
Plaintiffs argued for an injunction claiming:
Prop 206 is “unconstitutional because it violates the Revenue Source Rule in the Arizona Constitution by failing to include a revenue source for the Defendants’ implementation of the new minimum wage rate and mandated paid sick leave regulations and enforcements and by failing to establish a revenue source for the related increase in the necessary State’s general funding required to fund the significant increases in appropriations necessary to meet the State’s government contracting and compliance with Arizona Supreme Court orders and federal law obligations regarding AHCCCS.
The Proposition is also unconstitutional because it violates the Separate Amendment Rule in the Arizona Constitution by containing two separate and unrelated provisions – one gradually raises the Arizona minimum wage starting January I, 2017, and a second requires paid sick leave benefits for a segment of the community. As the Legislature can only make minor modifications to voter-passed initiatives under Ariz. Const. art4, pt. 1, $ 1(6XC), these initiatives operate similarly to constitutional amendments, and should be subject to the same constitutional requirements.