Arizona's top court rejected a challenge by the Arizona Chamber of Commerce and other business groups to overturn Proposition 206, which implemented a higher minimum wage and paid sick time accrual requirements. The new law increased the state’s minimum wage from $8.05 an hour to $10 an hour starting on January 1, 2017, and to $12 an hour by 2020, thereafter tying the annual increase to the consumer price index. The new law also contained a paid leave component that generally allows workers to accrue one hour of paid leave time for every 30 hours they work for large employers, up to a stated cap.

In a one-paragraph order issued Tuesday, Chief Justice Scott Bales provided that the Arizona Supreme Court unanimously rejected the challenge with respect to the constitutionality of the ballot measure, known as Proposition 206. Judge Bales said the Court, which heard oral arguments in the case last week, would issue a full written opinion explaining its legal reasoning "in due course."

Voters in Arizona approved Proposition 206 last November. About a month after the election, business groups filed a lawsuit in the Superior Court of Maricopa County, Arizona, alleging that the ballot measure was unconstitutional for two reasons. Mainly, the challenge focused on whether the new law violated the state constitution's revenue source rule that requires initiatives that increase state costs to have a revenue-raising component. The other argument was that Proposition 206 improperly joined together two unrelated provisions — minimum wage and sick leave — in violation of the state’s separate amendment rule. Both arguments were flatly rejected by the Arizona Supreme Court.

We will provide a subsequent update when the Arizona Supreme Court issues its written opinion.