by Matthew Holloway | Mar 4, 2026 | News
By Matthew Holloway |
The Arizona Court of Appeals has ruled that prevailing wage ordinances enacted by the cities of Phoenix and Tucson violate state law, ruling in favor of the Associated Minority Contractors of Arizona, represented by the Goldwater Institute in a lawsuit challenging those laws.
The decision holds that local ordinances requiring contractors on certain public works projects to pay “prevailing wages” are prohibited under a 1984 state statute, A.R.S. § 34-321(B), that forbids cities from imposing prevailing wage requirements. The appellate court affirmed the lower court’s judgment that the ordinances conflict with state law.
Goldwater’s lawsuit was brought on behalf of the Associated Minority Contractors of Arizona, the Arizona Builders Alliance, and the Arizona Chapter of the Associated General Contractors of America, who argued that the ordinances exceeded cities’ authority under Arizona statute.
In a statement, Timothy Sandefur, Vice President for Legal Affairs at the Goldwater Institute, said, “The real winners in today’s ruling are Arizona taxpayers—as the court itself made clear.”
Sandefur then quoted the court’s language, writing: “The Cities’ interpretation would grant the Cities broad power. With that power, the Cities could dictate how much any employer pays any employee anytime an employer contracts or subcontracts with the Cities. Put differently, the Cities by ordinance could dictate pay whenever an employee works under a public contract, regardless of the contract’s value or the nature of the work performed.”
He added, “That, of course, would cost taxpayers more—reducing their freedom of choice and their ability to invest in their own futures—all for the benefit of politicians and politically well-connected lobbyists.”
In a post to X, he wrote, “The decision’s an important victory for taxpayers throughout the state, who’d otherwise be forced to pay inflated prices for public works projects even though a state law approved by voters abolished ‘prevailing wages’ over 40 yrs ago.”
Prevailing wage laws, distinct from minimum wage laws, require employers on public contracts to pay workers based on wage rates calculated by formula, often higher than standard minimum wages. The 1984 state law expressly prohibits cities from requiring public works contracts to include prevailing wage provisions.
In the case before the appellate court, Phoenix and Tucson had passed ordinances applying prevailing wage rates to city contracts exceeding defined monetary thresholds, $4 million for Phoenix and $2 million in Tucson, and set wage requirements by reference to federal Davis-Bacon Act wage schedules.
Attorneys for the cities had argued that subsequent voter-approved minimum wage measures, including the 2006 voter-approved Minimum Wage Act and subsequent amendments, allowed local governments to regulate minimum wages and thus could support prevailing wage requirements. The court rejected that interpretation, finding that the statutory authority for cities to regulate minimum wage does not extend to prevailing wage mandates.
In its ruling, the appellate panel wrote that prevailing wage provisions do not qualify as “minimum wages” under the relevant Arizona statutes, noting that prevailing wage requirements apply only to a subset of workers on specific public contracts, whereas minimum wage laws apply generally to all employees once employed.
“Section 34-321(B) prohibits political subdivisions from requiring contractors or subcontractors to pay the prevailing rate of wages on public works contracts,” the court wrote. The panel further held that Phoenix’s and Tucson’s ordinances “conflict with § 34-321(B) and are therefore invalid.”
The court concluded that the 1984 prohibition on prevailing wage requirements remains in effect and was not repealed by later minimum wage laws, determining that the newer statutes and the prevailing wage prohibition can coexist without conflict.
“The Local Permission Provision authorizes regulation of minimum wages,” the court wrote, referring to § 23-364(I). “Prevailing wages are not minimum wages.”
Prevailing wage ordinances have been the subject of multiple legal challenges in Arizona. In 2024, a Maricopa County Superior Court judge similarly ruled against prevailing wage ordinances in Phoenix and Tucson, finding they violated the same state prohibition.
The appellate decision affects not only Phoenix and Tucson but also any Arizona city considering similar prevailing wage mandates under state law, consistent with the court’s interpretation of A.R.S. § 34-321(B) on municipal wage-setting authority for public works contracts.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Staff Reporter | Jun 26, 2024 | News
By Staff Reporter |
On Monday, an Arizona court ruled that government “prevailing wage” mandates for businesses were unlawful.
The Maricopa County Superior Court issued a ruling against the cities of Phoenix and Tucson concerning their prevailing wage ordinances, which required contractors on public works to pay its workers according to city and federal rate determinations. The Department of Labor defines prevailing wage as that average wage paid to similarly employed workers in a specific occupation in that area of intended employment.
The Maricopa County Superior Court agreed that state law (A.R.S. § 34-321(B)) prohibited any city from enacting such prevailing wage ordinances as the cities of Phoenix and Tucson had done in January.
“This Prevailing Wage Statute, by its plain language, prohibits any Arizona political subdivision, such as the City of Phoenix and the City of Tucson, from enacting an ordinance that requires contractors and subcontractors to pay their workers less than the prevailing rate of wages. Nevertheless, both cities did just that on January 9, 2024,” read the ruling.
Phoenix Ordinance G-7217 and Tucson Ordinance No. 12066 required city contractors or subcontractors under a contract with an aggregate value of $4 million or more and $2 million or more, respectively, to pay workers not less than the prevailing wage rate for the same class and kind of work in the Phoenix metropolitan area. Both cities required certain record keeping and instilled penalties for violations including contract rescission, disqualification from future city contracts, and liquidated damages up to three times the wages owed.
Yet, the cities argued that their ordinances were protected under Proposition 202, or the Raise the Minimum Wage for Working Arizonans Act. The cities claimed that the act functioned under the doctrine of implied repeal: since the act and state law were inconsistent, the act took precedence since it came after state law. The superior court rejected that interpretation, since the act itself didn’t address the term prevailing wage, and there remained definable differences between prevailing wage and minimum wage.
“A prevailing wage ordinance is not a minimum wage law, and the Minimum Wage Law did not impliedly repeal the prevailing wage prohibition because the two laws can be harmonized by ‘reasonable construction,'” stated the court. “They have fundamentally different underlying policy goals. Moreover, unlike minimum wage laws, which set a single, across-the-board floor on wages, prevailing wage measures impose a complex, fluctuating schedule of wage standards (determined by federal law and regulation) meant to approximate average wages for specific occupations and localities.”
The Goldwater Institute, in partnership with attorney Robert G. Schaffer, sued Phoenix over its prevailing wage ordinance on behalf of the Associated Minority Contractors of Arizona, the Arizona Chapter of the Associated General Contractors of America, and the Arizona Builders Alliance.
The institute’s vice president for legal affairs, Timothy Sandefur, said in a press release that the ruling protected fairer wages for workers.
“Today’s decision is a victory for Arizona taxpayers — who deserve to have public works projects run as closely as possible to true market conditions, instead of having their costs decreed by politicians in order to benefit their political friends,” said Sandefur. “It’s also a win for workers themselves, who deserve to do work in a competitive environment where wages are based on merit, instead of political dictate.”
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
by Daniel Stefanski | Jun 19, 2023 | News
By Daniel Stefanski |
A Republican State Senator is outraged after the Democrat Attorney General issued a recent response to a legislative inquiry about prevailing wage ordinances.
On Thursday, Democrat Attorney General Kris Mayes answered a 1487 complaint from Senator Catherine Miranda, who had previously asked if “a city may enact a prevailing wage ordinance that requires contractors on municipal public works contracts to pay their workers no less than the wage rates that prevail for their trade in their geographic location.”
Mayes affirmed that “a city may regulate the minimum wages paid within its geographic boundaries under Arizona Revised Statutes $ 23-364(1), so long as those wages are not less than the statewide minimum wage.” The attorney general added that “this authority includes the ability to require that employees of contractors on local public works projects be paid not less than the prevailing wage.”
This reply from Attorney General Mayes attracted the attention of one Republican lawmaker in particular, Senator T.J. Shope. The legislator took to Twitter to express his displeasure with the state’s top cop, writing, “This is a completely outside of the law interpretation by Attorney General Kris Mayes. If this were legal, why have the unions run bills at the Legislature every year to make prevailing wage legal, including a bill I once ran? I don’t have a problem with cities entering in to contracts with labor per se but do it the right way AND legally. My hope is a lawsuit will be filed immediately to challenge this ILLEGAL opinion by the AG. The AG should have run for Legislature if she wanted to enact law.”
Senator Shope may have been upset with Mayes’ opinion, but others around the state were not. Phoenix Councilwoman Laura Pastor tweeted, “Labor workers deserve to be compensated for their work. For years, I have consistently supported and pushed for prevailing wage – and I will continue to do so.”
Phoenix Vice Mayor Yassamin Ansari wrote, “Attorney General Mayes’ opinion is clear: cities may enact a prevailing wage ordinance to ensure that workers are paid fairly and competitively. I look forward to voting YES (again) for a strong Phoenix policy by the end of this year.”
Ansari’s comment was referencing a back-and-forth saga over a prevailing wage ordinance in the City of Phoenix earlier this year. In March, five members of the City’s Council voted to approve the Prevailing Wage Ordinance for City Projects to “ensure that (Phoenix’s) development growth is match with the skilled labor (the city) urgently needs when (Phoenix) invests in the growth of (its) communities.”
This action from Phoenix led to the threat of litigation from the Goldwater Institute, which sent an April letter to the Phoenix City Council to “express serious concerns” about the passage of the Ordinance, warning that if “the enacted version of the ordinance regulates matters that are expressly pre-empted by state law, it exposes the City to a high risk of litigation.” After the first Phoenix Council vote, there was a change in two seats, leading to another vote by the Council to repeal the Ordinance.
Mayor Kate Gallego was among the votes to repeal the Ordinance. She stated at the time, “I believe in doing things the right way, not the fast way, and that’s what we decided to do today. I am optimistic that we will find a path forward for better pay for construction workers while, at the same time, put sound policy on the books that survives legal challenges.”
Senator Miranda, the author of the 1487 complaint that generated Mayes’ opinion, seemed to have officials like Gallego in mind when she posted, “No hiding behind the fact it might be illegal. It’s not. Kris Mayes has spoken, “If two conflicting statutes cannot operate contemporaneously the more recent specific statute governs over [an] older more general statute.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Daniel Stefanski | May 2, 2023 | News
By Daniel Stefanski |
Days after a powerful Arizona government watchdog group scored a major victory in the City of Phoenix, it is turning its attention to a neighboring city over the same issue.
On Monday, John Thorpe, a Staff Attorney with the Goldwater Institute, sent a letter to Tempe Mayor Corey Woods and councilmembers, expressing serious concerns about the proposed ordinance “Relating to the Payment of Prevailing Wages on City Construction Contracts” to be considered at the Council’s upcoming meeting on May 4.
Thorpe noted his understanding that “the proposed ordinance imposes, among other measures, prevailing wage and apprenticeship requirements on all contractors who participate in public works projects for the City for contracts exceeding $250,000.”
Much like the letter the Goldwater Institute previously transmitted to the City of Phoenix, Thorpe warned, “if the City adopts this ordinance and regulates matters that are expressly pre-empted by state law, it will expose the City to a high risk of litigation, as well as costs and attorneys’ fees for parties who successfully challenge the unlawful ordinance.” He also highlighted the troubling nature of the Council’s consideration of this proposal “with less than one week’s notice and little chance for input from those most affected.”
The Goldwater Institute was again representing the Arizona Builders Alliance and the Associated Minority Contractors of Arizona.
The letter to Tempe’s municipal leaders follows the repeal of the prevailing wage ordinance from the City of Phoenix last month after a change of two councilmembers. The vote flipped from 5-4 (approval of prevailing wage) to 6-3 (opposition of prevailing wage). Phoenix Mayor Kate Gallego voted to repeal the ordinance, writing, “Workers deserve a living wage – and we can deliver that through a robust, public process that doesn’t put the city in legal and financial jeopardy. That’s why I voted with a majority of Council to direct city staff to find legally viable ways to increase wages on city projects.”
On behalf of the Goldwater Institute, Thorpe cheered on the reversal from the City of Phoenix, stating, “Yesterday’s repeal….is a reminder that Goldwater will never stop fighting to hold government accountable and to defend Americans’ economic freedom from burdensome, counterproductive regulations.”
The Arizona Attorney General’s Office is still considering a 1487 complaint from Democrat Senator Catherine Miranda, who submitted the request on April 17 to “clarify the apparent conflict between two statutes and consequently determine whether Phoenix has the authority to enact prevailing wage at the municipal level.” Though Tempe isn’t the focus of the inquiry to the state’s chief law enforcement officer, her final disposition could give valuable direction and information if more cities and towns attempt to pass versions of the prevailing wage ordinance.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Daniel Stefanski | Apr 24, 2023 | News
By Daniel Stefanski |
Just days after a powerful Arizona government watchdog group threatened possible legal action, the City of Phoenix repealed a controversial ordinance that had passed the previous month.
On Wednesday, the Phoenix City Council voted to repeal the prevailing wage ordinance, 6-3, after a change of two councilmembers. Councilmembers Kesha Hodge Washington, Jim Waring, Ann O’Brien, Kevin Robinson, Debra Stark, and Mayor Kate Gallego voted for the repeal; while Councilmembers Yassamin Ansari, Laura Pastor, and Betty Guardado voted to maintain the ordinance.
After the vote, Mayor Gallego took to Twitter to explain her decision, writing, “Workers deserve a living wage – and we can deliver that through a robust, public process that doesn’t put the city in legal and financial jeopardy. That’s why I voted with a majority of Council to direct city staff to find legally viable ways to increase wages on city projects. I believe in doing things the right way, not the fast way, and that’s what we decided to do today. I am optimistic that we will find a path forward for better pay for construction workers while, at the same time, put sound policy on the books that survives legal challenges.”
The Goldwater Institute, which had sent a letter to the Council earlier in the month, championed the news out of Phoenix. John Thorpe, a staff attorney with Goldwater, stated, “Yesterday’s repeal is good news for businesses, their employees, and all taxpayers – and it’s a reminder that Goldwater will never stop fighting to hold government accountable and to defend Americans’ economic freedom from burdensome, counterproductive regulations.”
Thorpe wrote that the ‘Prevailing Wage Ordinance for City Projects’ law, “introduced on short notice with almost no chance for public scrutiny from anyone it would impact, required businesses that contract with the city for construction projects costing more than $250,000 to follow a slew of new requirements: they would have had to provide their employees with wages and benefits based on complicated formulas produced by the federal government, keep painstaking records, and comply with a host of other rules and regulations. Worse still, all these regulations came with the risk of heavy fines and potentially crippling lawsuits, even for minor infractions.”
On March 21, three Phoenix City Councilmembers – Carlos Garcia, Betty Guardado, and Laura Pastor, sent a letter to City Manager Jeff Barton, requesting a Special Meeting the following day to consider the Prevailing Wage Ordinance for City Projects. The three councilmembers wrote, “We believe it is time for leadership to address the lack of skilled construction workers needed to fill the rising demand for labor in Phoenix. We know that areas of the country with prevailing wages for city projects have a greater supply of apprentices and pathways for young people to find and join a skilled trade. A prevailing wage ordinance for city projects will ensure that our development growth is matched with the skilled labor we urgently need when we invest in the growth of our communities.”
The next day, the Ordinance was approved by a vote of 5-4. Councilmembers Garcia, Guardado, Pastor, Sal DiCiccio, and Yassamin Ansari voted in favor of the Ordinance. Garcia and DiCiccio have since left the Phoenix City Council, being replaced by Kevin Robinson and Kesha Hodge Washington.
On April 13, the Goldwater Institute, representing the Arizona Builders Alliance and the Associated Minority Contractors of Arizona, sent a letter to the Phoenix City Council to “express serious concerns” about the Ordinance passed on March 22. Thorpe, writing again for Goldwater, informed the City that if “the enacted version of the ordinance regulates matters that are expressly pre-empted by state law, it exposes the City to a high risk of litigation.” Thorpe outlined that “when the Legislature enacts a law on a matter of statewide concern, that law pre-empts and overrides any conflicting municipal provision. In this instance, voter-approved state law dating back to 1984 expressly provides that ‘prevailing wage’ requirements for public works contractors are a matter of statewide concern and may not be imposed by municipalities.”
Thorpe also found “it troubling that this ordinance was enacted after providing the public barely twenty-four hours’ notice and without any meaningful input from the many stakeholders it will affect.” He also pointed out that “the final version (of the ordinance) enacted by the Council has not yet been made publicly available,” which he questioned the existence of “any legal authority the City possesses to withhold a duly enacted ordinance from public inspection.”
Democrat Senator Catherine Miranda also waded into the discussion on the City of Phoenix’s action in March, submitting a 1487 request to Arizona Attorney General Kris Mayes on April 17, to “clarify the apparent conflict between two statutes and consequently determine whether Phoenix has the authority to enact prevailing wage at the municipal level.”
Before the new coalition voted to repeal the Prevailing Wage Ordinance, another Democrat Senator, Anna Hernandez, voiced her disapproval with Mayor Gallego’s pending action, tweeting, “(Mayor Gallego) is once again turning her back on our union brothers and sisters.” Hernandez also shared an excerpt from a questionnaire that Gallego filled out during her mayoral run, where she wrote, “At the end of the day, prevailing wage laws are good for working families in the city of Phoenix and I will do what I can to support the enforcement of federal prevailing wage law, and advocate for a reintroduction of Arizona’s state or city prevailing wage law.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
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