The Arizona state legislature recently passed House Bill 2579 which provides that no city, town or political subdivision is permitted to regulate "nonwage compensation" such as fringe benefits, sick pay and vacation pay.

Background

Originally passed by voters in 2006, Arizona's Proposition 202 authorized a city, county or town to "regulate minimum wages and benefits within its geographic boundaries." As cities such as Tempe and Tucson were considering sick leave plans earlier this year, Arizona Governor Doug Ducey spoke in opposition of such local ordinances during his 2016 State of the State speech. On May 11, 2016, Governor Ducey signed H.B. 2579 into law to prohibit such local control of nonwage compensation.

What is "nonwage compensation?"

Under the law, no city, town or political subdivision of Arizona may enact its own regulations for nonwage compensation including:

— fringe benefits
— sick pay, vacation pay, or severance pay
— welfare benefits
— commissions or bonuses
— retirement plan or pension contributions
— child or adult care plans
— other amounts promised to an employee in excess of the minimum wage.

Coalition asks a judge to void the new law

Some state and local elected officials and the United Food and Commercial Workers Local 99 have sued the state seeking to block enforcement of the new law (Courthouse News Service, June 24, 2016). The plaintiffs claim that H.B. 2579 interferes with charter cities' rights to legislate local matters free from interference by the state legislature. Legal proceedings are ongoing.

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