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AG: Don't force businesses into benefits corner
Attorney General fights initiative over what companies must offer employees

Attorney Jim Barton
Photo by Howard Fischer, For the Courier.

Attorney Jim Barton

PHOENIX — Attorney General Mark Brnovich is asking a judge to rule that the word “benefits” in a voter-approved measure is not the same as “fringe benefits.”

And the goal of this judicial war of words is a bid by Brnovich to block local governments from telling private companies what benefits they have to offer their workers.

Assistant Attorney General Rusty Crandell, writing on behalf of Brnovich, is trying to preserve a 2016 measure adopted by Republican legislators to block local governments from telling private companies everything from how much time off they will offer workers to vacation mandates and even how far ahead of time workers need to be told of schedule changes. Crandell specifically wants Maricopa County Superior Court Judge Robert Oberbillig to throw out a challenge to that law by Democrat legislators who voted against it.

But attorney Jim Barton, representing the challengers, said the 2006 voter-approved initiative setting the state’s first-ever minimum wage specifically authorizes such local laws on fringe benefits. And Barton said that was reinforced just this past November when voters adopted Proposition 206, which raised the wages again and mandated for the first time ever paid sick leave.

Businesses are powerless to block “living wage” legislation like what voters adopted in Flagstaff and what is being considered in other communities. That’s because Prop 202, the 2006 initiative, specifically allows cities to set wages even higher than what the state requires.

Fearful of even broader local mandates, the restaurant industry last year got Rep. J.D. Mesnard, R-Chandler, to craft a legal end-run of sorts around the initiative. Mesnard wrote a law that redefines “wages” — the thing that the state cannot preempt because it was approved at the ballot — to include only the salaries being paid to workers.

Everything else was defined as “nonwage compensation,” ranging from sick pay, vacation pay and severance benefits to commissions and pension contributions. That also includes things like maternity leave.

In challenging Mesnard’s law last year, Barton points out the Arizona Constitution forbids lawmakers from altering voter-approved laws unless the measure “furthers the purpose” of the original law.

In this case, he said, the 2006 initiative specifically says that a local government “may by ordinance regulate minimum wages and benefits within its geographic boundaries.” That, he said, makes the 2016 law illegal.

And Barton said even if a court were to conclude the Mesnard-crafted law could be interpreted as furthering the purpose of the 2006 initiative, Arizona’s constitution says changes to initiatives require a three-fourths vote of both the House and Senate. Mesnard’s legislation was approved by the House on a 34-26 margin; the Senate tally was 18-11.

It is that margin that gives lawmakers who opposed the law — and had enough votes to deny the measure that three-fourths margin — standing to sue.

In his new court filings, Crandell told Oberbillig all of that is irrelevant. And the key is his argument “benefits” doesn’t mean what challengers say it means.

“The declared purpose of Prop 202 is that ‘all working Arizonans deserve to be paid a minimum wage that is sufficient to give them a fighting chance to provide for their families,’” Crandell said. He said the initiative accomplishes that by setting the minimum wage and providing for enforcement rights and penalties.

Crandell added there was nothing in the publicity brochure, for or against, that mentioned anything other than wages.

“If the voters of Arizona intended to hand over control of all employee benefits to local governments — enabling local governments to saddle businesses with a patchwork of regulations regarding nonwage benefits that vary from one city to the next — one would expect a clear explanation of such a feature in light of its significant impact on business,” Crandell wrote. “Tellingly, nothing in the history of Prop 202 alerted voters to this sea change in Arizona employment law.”

Barton, however, wants Oberbillig to rule that it doesn’t take a legal parsing to conclude that “benefits” are what they seem to be, even without the word “fringe” in front of it.

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