What You Need to Know About the Labor and Employment Initiatives That Will Potentially Appear on Arizona’s 2024 Ballot

By Brett W. Johnson, John F. Lomax, Jr., Tracy A. Olson, Charlene Warner, and Owen Toepfer

Employee wages and the right to work — perennially relevant issues by any standard — may appear on Arizonans’ ballots this fall. If the proposed initiatives garner enough signatures and survive any potential legal challenges, Arizonans will have the opportunity to vote on two measures relating to these far-reaching and significant issues. The One Fair Wage Act would, among other things, raise minimum wage for Arizona employees, including “tipped” employees, and the Arizona Works Together Act would repeal Arizona’s “right-to-work” law, which currently protects Arizona employees’ rights to obtain or maintain employment without joining a labor union.

The One Fair Wage Act

Under current law, Arizona increases its minimum wage, at present $14.35 per hour, each year to reflect any increase in the cost of living.¹ Arizona law also allows employers of tipped employees to offset their minimum wage obligations by counting up to $3 per hour of a tipped employee’s tips toward the minimum wage.² The One Fair Wage Act would alter both of these provisions of Arizona’s minimum-wage law. 

First, the Act would retain the current cost-of-living structure for annual minimum-wage increases, but it would tack on an additional $1 beyond the typical cost-of-living increase in both 2025 and 2026. In 2027 and beyond, the cost-of-living increases would remain in place.

Second, and perhaps more notably, the Act would gradually reduce the amount of an employee’s tips that an employer can use to offset minimum wage obligations in 2025 and 2026. Starting in 2027, employers would have to pay tipped employees full minimum wage, exclusive of tips. 

Further, the Act would add an exemption from Arizona’s minimum-wage law for tribal entities while retaining exemptions currently applicable to independent contractors and the state and federal governments. 

If the One Fair Wage Act is adopted by Arizona voters, it could have far-reaching implications. The Act could result in imbalances in the labor market, and employers, particularly hospitality and restaurant employers, might be forced to reevaluate certain aspects of their business models.

The Arizona Works Together Act

The National Labor Relations Act allows state governments to enact so-called “right-to-work” laws, which typically protect employees’ rights to obtain or retain employment without joining unions and sometimes even protect employees’ rights to maintain employment without paying dues or fees to unions for purposes of collective bargaining. Roughly half of the United States — including Arizona — have enacted such laws. Since 1946, the Arizona Constitution has protected employees’ rights to obtain and retain employment without joining the union representing the employer’s workforce (if there is one).³

That might change soon. The so-called “Arizona Works Together Act” would amend the Arizona Constitution to allow an employer to agree to a “clause in the collectively bargained agreement requiring membership in, or alternatively financial support of, the labor organization of the employees acting collectively to obtain such an agreement.” Although states have largely trended towards adopting right-to-work laws since the 1940s, the Arizona Works Together Act would place Arizona in the ranks of a couple other states, like Michigan and Missouri, that have recently repealed right-to-work laws.

This law, if adopted, has the potential to significantly alter labor relations between employers and unions in Arizona. And, an employee who previously enjoyed Arizona’s right-to-work protections might — in order to keep his or her job — be required to either join a union or provide financial support to the unions that represents the employee for purposes of collective bargaining. 

Ballot Initiative Process

The Arizona Constitution reserves to voters the power to propose new laws or constitutional amendments through the initiative process.⁴ To qualify for the ballot, the initiative’s sponsor (a political committee) must file an Application for Serial Number with the Secretary of State’s Office containing the complete title of the proposed initiative.⁵ The Application must also include a 200-word description that must alert a reasonable person to the initiative’s principal provisions.⁶ 

For the current 2024 election cycle, an initiative that amends an Arizona statute must collect at least 255,949 signatures for a statutory measure, or 10% of all votes cast for Governor in the 2022 election cycle. Similarly, for a constitutional amendment, it must collect at least 383,923 signatures, or 15% of all votes cast for Governor in 2022.⁷ These signatures must be collected only from “qualified electors,”⁸ and filed with the Secretary of State by July 3, 2024 — at least four months prior to the November 5, 2024 general election.⁹

Before an initiative is placed on the ballot, the Secretary of State will review the petition sheets to ensure that enough signatures have been collected.¹⁰ A challenger can attempt to reduce the number of signatures below the constitutional minimum by striking legally deficient signatures or petition sheets — for instance, because a signer was not a qualified elector, a circulator failed to register or was unqualified to circulate petitions, or the title and text of the initiative was not affixed to the petition sheet during the entire signature gathering process.¹¹

There are also a variety of ways to raise pre-election legal challenges to an initiative’s validity. Under the “single subject rule,” if the subjects covered by an initiative are so dissimilar that they cannot logically be understood to fall under one general subject, the entire initiative is void. Another option for challenge arises under the “title requirement,” which requires that if the title of the initiative is not “worded so that it puts people on notice as to the contents of the act,” any part not expressed in the title is void.¹²

Challengers can also disqualify an initiative by challenging the 200-word description, either because the sponsor omitted a principal provision of the measure or did not describe the principal provisions accurately.¹³  

Any challenges to the legal sufficiency of a ballot measure in 2024 must be submitted within 10 days after an initiative has been filed.¹⁴

Avenues for Possible Legal Challenges

Outside of the possibility of signature or petition sheet deficiencies, which remain to be seen, there are several grounds in which each employment initiative could become subject to a pre-election legal challenge. For instance, potential challenges to the One Fair Wage Act could include whether the minimum wage and tipping provisions are sufficiently similar subjects to appear in the same initiative, or whether the title sufficiently puts voters on notice that an employer will no longer be permitted to offset tipped employees’ wages. 

Also relevant is whether the 200-word description sufficiently describes all principal provisions — for instance, by declining to specifically describe how the initiative repeals that the “establishment of a uniform minimum wage is a matter of statewide concern” and that the initiative would expressly hold the minimum wage unchanged if the cost of living sees a negative change.¹⁵

As for the Arizona Works Together Act, a potential challenge could dispute whether the 200-word description sufficiently describes the Act’s guarantee that no “State or any subdivision thereof” shall “interfere with or restrict efforts by employees acting collectively to obtain” an agreement with a “clause in the collectively bargained agreement requiring membership in, or alternatively financial support of, the labor organization of the employees acting collectively to bargain for the agreement.”

Given the far-reaching implications related to the proposed ballot initiatives, potentially affected government agencies, employers and other stakeholders should be proactive in preparing for the effects of these initiatives. In addition, based on this analysis, interested stakeholders may want to consider the variety of legal avenues that may be available to challenge the two initiatives.

Footnotes

1. A.R.S. § 23-363. [Back]

2. Id. [Back]

3. Ariz. Const. Art. XXV. [Back]

4. Ariz. Const. Art. IV, pt. 1, § 1(2). [Back]

5. Arizona Secretary of State, 2023 Initiative & Referendum Guide, at 8 (May 9, 2022), https://azsos.gov/sites/default/files/2023-10/2023_03_initiative_and_referenda_handbook.pdf. [Back]

6. Id. [Back]

7. Ariz. Const. Art. IV, pt. 1, § 1(2), (4). [Back]

8. A “qualified elector” is anyone who qualified and properly registered to vote in Arizona, is at least 18 years old before the election, and has provided satisfactory evidence of citizenship. A.R.S. § 16-121. [Back]

9. https://azsos.gov/elections/ballot-measures/initiative-referendum-recall/initiatives. [Back]

10. Supra, n.5 at 12–16. [Back]

11. See Generally A.R.S. Title 19, Chapter 1. [Back]

12. Ariz. Const. art. 4, pt. 2, § 13. [Back]

13. Molera v. Hobbs, 250 Ariz. 13, 19-20 ¶¶ 8–13 (2020). [Back]

14. A.R.S. § 19-161(A). [Back]

15. A.R.S. § 23-362. [Back]