A judge on Friday rejected an effort from business groups to immediately block a voter-approved increase in Arizona's minimum wage that takes effect in just over two weeks.
Maricopa County Superior Court Judge Daniel Kiley said it wouldn't be fair to temporarily halt the increase since the Arizona Chamber of Commerce and Industry only sued the previous day. Instead, he set a hearing for next week to consider the suit.
Attorney General Mark Brnovich's office is defending the law along with backers of Proposition 206. Voters approved the measure raising the minimum wage from $8.05 an hour to $10 on Jan. 1 and to $12 in 2020 by a wide margin on Nov. 8.
The Chamber lawsuit alleges the wage increase saddles the state with new costs without following a state constitutional requirement that it identify a funding source. It also claims Proposition 206 illegally added a second issue, mandatory paid time off.
Backers argue the measure specifically exempts the state, and its decision this week to raise payments to some health care providers is an optional expenditure that doesn't trigger a funding requirement. The time off requirement is triggered only by a constitutional amendment, they argue, now a change in law like Proposition 206.
Attorney Brett Johnson, representing the Chamber and others who sued, said immediately blocking the law will prevent businesses from having to lay off workers.
"We're two weeks out from Jan. 1," Johnson said. "If employers are going to think that this proposition is actually constitutional, they're making business decisions right now as to whether to lay off people on Monday."
Assistant Attorney General Charles Grube said he plans to aggressively defend the law and urged Kiley not to block it.
"It seems to us that ... people are acting believing that that proposition is going into effect, and that frankly is something I agree with," Grube said. "I think it equally likely that if a restraining order was entered and vacated next Tuesday we run the risk of causing even more difficulty."
Kiley declined to act Friday, instead setting several hours of hearings on the merits of the Chamber lawsuit on Tuesday.
The business groups brought the legal action despite the measure winning overwhelming support in the election, passing with 58 percent of the vote.
Outside court, Johnson said voters weren't told of tens of millions in state costs when they approved the measure.
"Quite honestly there needs to be a fix, and the whole of idea of this litigation is to provide breathing room for companies, for the government, for employers and for employees to get their hands around what Prop. 206 means for the state of Arizona and make a rational decision."
Jim Barton, the attorney representing Proposition 206 backers, called the lawsuit "an extreme longshot."
"If they won on any of their claims, it will be the first time anybody won on this kind of claim," Barton said. "I think it's part of a PR strategy -- it's not a legal strategy, I don't think."
Whoever loses is expected to appeal to the state Supreme Court.