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Arizona Senate gives early approval to 'living wage' ban

Arizona Senate gives early approval to 'living wage' ban

Localities couldn't say how much businesses must pay employees

PHOENIX - Seeing what's happened elsewhere, the restaurant industry has persuaded state lawmakers to prevent cities and counties from dictating how much employers have to pay their workers.

On a voice vote, the Senate gave preliminary approval Wednesday to legislation that would make it illegal for Arizona cities to mandate any employee benefits for companies that operate within city limits. That includes not only compensation but also paid leave, allowable absences, meal breaks and rest periods.

The House already has approved HB 2280. That means it requires only a final Senate roll-call vote before going to Gov. Jan Brewer.

Sherry Gillespie, lobbyist for the Arizona Restaurant Association, said there is no real problem here - yet. "We're fortunate to get out in front of it," she said.

Some cities including San Francisco have imposed their own "living wage" ordinances that cover every local company. The 2013 rate is $10.55 an hour.

By contrast, Arizona's voter-mandated minimum wage is $7.80 an hour; the federal minimum wage is $6.25. In Arizona, companies such as restaurants are allowed to pay workers $3 less per hour if those employees make up the difference in tips.

San Francisco also mandates paid sick leave.

Some Arizona communities, however, already have more limited laws.

In Tucson, for example, a city ordinance spells out how much firms that do business with the city must pay, a figure that is adjusted annually. For those contract jobs, the current city minimum is $11.07 for jobs that don't include insurance or $9.84 for jobs with a company insurance plan.

A similar Pima County ordinance says companies with county contracts must pay $11.32 an hour this year for workers not receiving benefits and $10.07 for those who get the equivalent of at least $1.25 in benefits.

Rep. Tom Forese, R-Chandler, said while the wording of his measure is broad, it is not his intent to disturb those kinds of laws. Instead, he wants to keep communities from mandating "living wages" and other benefits for all local businesses.

"There has been a threat in the industry," the restaurant association's Gillespie said. "This bill best addresses that threat."

She said the restaurant industry needs special protections against such possible regulations here.

"We feel that these benefits mandates that are being proposed (elsewhere) do not consider unique scheduling conflicts of the restaurant industry," Gillespie said.

"We already have very flexible work schedules," she said. "They already operate on tight margins."

Gillespie said the industry lost about 500 restaurants in Arizona during the recession and is now down to about 8,500 establishments.

The other issue is uniformity.

Shane Hitzeman, who owns several Burger King franchise operations in Arizona, said there would be significant increases in administrative costs if he had to provide different wages or benefits in different communities. Hitzeman said he has seen that in California where he also owns restaurants.

Only Sen. Steve Gallardo, D-Phoenix, spoke out against the bill when it came up for debate on Wednesday.

"Here we go once again," he said. "We are intervening (in) what is a local control issue." He said these questions should be left to locally elected city councils.

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