Minimum wage

Tucson’s Minimum Wage Act, also known as Proposition 206, took effect on April 1. The Act increased the minimum wage to $13 per hour for all employees (full-time, part-time, temporary and those engaged through an employment or staffing agency) who perform at least five hours of work per workweek within Tucson city limits. The minimum wage is scheduled to increase to $13.50 by January 1, 2023, $14.25 by January 1, 2024, and $15 by January 1, 2025, followed by further adjustments each January, based on inflation.

However, Tucson employers should be aware that the Act does far more than merely raise Tucson’s minimum wage. The Act has many other provisions that will affect Tucson employers. Some highlights:

The Act creates a City Department of Labor Standards, charged with implementing and enforcing the Act.

“Work hours” under the Act expressly include:

• Time that an employer requires the employee to undergo a security screening immediately prior to or following a work shift;

• Time that an employer requires the employee to be on the employer’s premises or at a prescribed work site; and

• Time that an employer requires the employee to be logged in and actively attentive to an employer-provided computer program, phone application, or similar device.

Under the Act, a worker is generally assumed to be an employee, unless the employer can establish that:

• The worker is free from control and direction of the hiring entity regarding the performance of work;

• The worker performs work that is outside of the usual course of the hiring entity’s business; and

• The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the hiring entity.

The Act prohibits employers from requiring wage payments be made using a pay card, a reloadable debit card, or some similar method that requires the employee to possess a valid Social Security number. (Some argue that this requirement may conflict with and be preempted by federal and state law.)

“Large employers” – defined as employers with an average of at least 26 employees (including part-time, temporary and those employees located outside of the city) during the final quarter of the previous calendar year – must pay employees at least three hours of minimum wage compensation when:

• The employee is scheduled to work at least three hours, timely reports for duty and is able to work the entire shift, and the employer engages the employee for less than three hours; or

• The employee is scheduled to work at least three hours, and the employer cancels the employee’s shift with less than 24 hours’ notice.

Like Arizona’s wage laws and the Fair Labor Standards Act, the Act generally prohibits employers from making deductions from employee pay, if such deductions would cause the employee to receive less than the minimum wage.

The Act prohibits retaliation against employees for exercising their rights under the Act. Further, if an employer takes an adverse action against an employee within 90 days of the employee’s exercising his or her rights under the Act, such conduct creates a rebuttable presumption that the adverse action was retaliatory. Notably, “adverse action” is defined to include actions such as failing to rehire after a seasonal interruption of work and changing an employee’s status to that of an independent contractor.

The above is a general summary of some of the Act’s key requirements. It is very possible that the Act may be challenged on federal and state constitutional or other grounds. Tucson employers may wish to consult.