Arizona Business Leaders Sue the State Over Wage Increase and Sick Time

December 15, 2016, several Arizona employees and business leaders, including Arizona Chamber of Commerce and Industry, Greater Phoenix Chamber of Commerce, Tucson Hispanic Chamber of Commerce, Arizona Licensed Beverage Association, and others filed a lawsuit against the State of Arizona, et al. in Maricopa County. The suit claims Proposition 206 is unconstitutional. Proposition 206, a ballet measure which passed in November, raises minimum wage and mandates paid sick time.

The lawsuit argues that Proposition 206 (aka The Fair Wages and Health Families Act) is invalid on two grounds: that it violates a constitutional provision requiring funding to have a specified funding source; and the proposition included two separate issue provisions - a higher minimum wage and paid sick time for employees - in a single ballot measure (in opposition to the single-subject rule).

The suit asks for an injunction to block the law, which is set to take effect on January 1, 2017 for the minimum wage portion, and July 1, 2017 for the sick paid time potion. Due to the short timeline and unpredictable outcome, employers should continue to prepare for timely implementation of the Act.