Assigned to COM AS PASSED BY COW
ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
AMENDED
FACT SHEET FOR H.C.R. 2031
employee benefits; compensation; state preemption
Purpose
Subject to voter approval, constitutionally declares that the regulation of employee benefits
is of statewide concern and not subject to further regulation by a city, town or county, with
exceptions.
Background
Statute states that the regulation of employee benefits, including nonwage compensation,
paid and unpaid leave and other absences, meal breaks and rest periods, is of statewide concern.
The regulation of nonwage employee benefits is not subject to further regulation by a city, town
or other political subdivision of Arizona. Any employee benefit, including nonwage compensation,
paid and unpaid leave and other absences, meal breaks and rest periods, provided by a city, town
or other political subdivision of Arizona to its employees is exempt from state preemption.
Nonwage compensation includes fringe benefits, welfare benefits, child or adult care plans,
sick pay, vacation pay, severance pay, commissions, bonuses, retirement plan or pension
contributions, other federal employment benefits and other amounts promised to the employee that
are more than the minimum compensation due an employee by reason of employment (A.R.S.
§ 23-204).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Declares, subject to voter approval, that the regulation of employee benefits, including wage
and nonwage compensation, paid and unpaid leave and other absences, meal breaks and rest
periods, is of statewide concern and not subject to further regulation by a city, town or county.
2. Exempts a city, town or county from the preemption for the purposes of a minimum wage if
allowed by state law and if:
a) the local minimum wage is at or above the statewide minimum wage; and
b) the city, town or county does not diminish the ability of employers of customarily and
regularly tipped employees from applying a wage less than the minimum wage only if
allowed by state law.
3. Requires any minimum wage adopted by a city, town or county to be enforced solely by the
state agency designated by the Legislature for wage enforcement and prohibits the wage from
being enforced by a city, town or county. FACT SHEET – Amended
H.C.R. 2031
Page 2
4. Specifies that the regulation of employee benefits does not affect the authority of a city, town
or county to set the wages or benefits for the city's, town's or county's employees or otherwise
limit the authority of a city, town or county to enter into contracts for personal services.
5. Requires the Secretary of State to submit the proposition to the voters at the next general
election.
6. Becomes effective if approved by the voters and on proclamation of the Governor.
Amendments Adopted by Committee of the Whole
1. Eliminates the preemption of further regulation of employee benefits by other political
subdivisions and includes counties in the preemption.
2. Exempts a city, town or county from the preemption for the purposes of a minimum wage if
allowed by state law and if:
a) the local minimum wage is at or above the statewide minimum wage; and
b) the city, town or county does not diminish the ability of employers of customarily and
regularly tipped employees from applying a wage less than the minimum wage only if
allowed by state law.
3. Requires any minimum wage adopted by a city, town or county to be enforced solely by the
state agency designated by the Legislature for wage enforcement and prohibits the wage from
being enforced by a city, town or county.
4. Specifies that the regulation of employee benefits does not affect the authority of a city, town
or county to set the wages or benefits for the city's, town's or county's employees or otherwise
limit the authority of a city, town or county to enter into contracts for personal services.
5. Makes conforming changes.
House Action Senate Action
COM 2/15/22 DP 6-4-0-0 COM 3/23/22 DP 5-3-1
3
rd
Read 2/23/22 31-28-1
Prepared by Senate Research
June 22, 2022
JT/CY/sr