Formal Position on Proposition 414

March 6, 2017
Elevate Flagstaff

Following the council meeting, held 02/14/2017, we, those that represent Elevate Flagstaff, have created a cohesive outline of the edits to Prop 414 that we would strongly suggest. Given that some are/are not from a business background we thought to outline key elements of the existing proposition that do not provide balance in our community.

Elevate Flagstaff was founded representing a wide variety of perspectives. Our core has reached out to hearing further concerns and after much discussion we feel that we have identified solutions that would be beneficial in supporting our community as a whole.

In an effort to protect our community, our people, and our economy, we have evaluated and examined best case solutions for the future sustainability of the Flagstaff economy and hope they will be taken with great consideration.

We, along with members of City Council and various legal opinions, do not believe the Council has the legal authority to amend Proposition 414. Therefore, we recommend the following be addressed through a comprehensive plan of action:

1. Schedule of Required Raises
    a. The most common concern is the compounding effects of 414/206. A​-​$2 raise on July 1s​t​, 2017, immediately following the January $1.95 raise is too much too fast.

    b. Knowing what we do now (that both 206 and 414 passed AND that minimum wage just increased by $1.95), we suggest the following time line for future increases in Flagstaffs minimum wage:

  • January 1s​t​, 2018 - $10.50
  • January 1s​t​, 2019 - $11.00
  • January 1s​t​, 2020 - $11.50
  • January 1s​t​, 2021 - $12.00
  • January 1s​t​, 2022 - $12.50

2. Enforcement of Proposition 414 - The enforcement provisions of 414 are too much, too fast, as well. Current Arizona State Laws already addresses the issues of wage theft. We believe implementation of educating employees, employers, should be made BEFORE the city creates the 414 mandated “Office” with its associated problems including:
    a. The City Attorney’s office should be directed to provide free assistance to those who feel they are victims of employment/labor law. This assistance would focus on providing access to the existing enforcement structure at the state level.

    b. The City Attorney’s office would track the cases and report annually to city council on the status, trends, and volume of claims so that additional resources/steps can be implemented if this system is failing.

    c. The City and/or other organization should begin an education program targeting both employees and employers to ensure they know the wage/labor laws and how they are enforced.

    d. If and ONLY if the above steps prove unsuccessful, the following parts of 414 would need to be addressed before it could be implemented:

        i. As written, 414 violates due process rights guaranteed by the U.S. Constitution. An anonymous tip to an “Office” with the authority to singlehandedly investigate, determine guilt and assess fines does not respect our rights to unreasonable search and seizure.

        ii. The Rule Making Process for the conduct of the “Office” must include significant public participation such that employees and employers are equally protected under the law. As it is currently stated, the “Office” would have access to the total ins and outs of the business. This information is sensitive material and confidentiality is important to remain competitive in all of our businesses. If wage theft is an issue, this then falls within the payroll department, and we then believe it’s fair to say that access to a single individual’s payroll records is a fair compromise. There needs to be a clearer definition of what access this “Office” holds.

        iii. The 414 requirement that the fines assessed by the “Office” be used to PAY the “Office” creates an automatic conflict of interest and must be removed.

        iv. 414 fails to provide a path of appeal to the “Office” and must be addressed.

3. Tipped Employees - We believe that Tipped Employees have been underrepresented in this discussion. We have been told that tipped employees are therefore forming an outreach team to better connect and understand their desires of this important segment of our community.
    a. We will continue reaching out to the tipped employees group to allow their voice to be heard as to what they feel best fits their needs. In other cities, like Santa Fe, NM, Tipped Employees opted out of the minimum wage provisions so that they could continue the status quo.

    b. Results of this effort should be included in any future discussions on Flagstaff minimum wage laws.

4. The “Plus $2 Provision” - We believe that “Plus $2” is an arbitrary number that does not accurately reflect research done locally for the application in Flagstaff.

5. A Cap On Inflation Driven Increases - The future of our economy is very uncertain. Run-away inflation is a real possibility and should that occur, the minimum wage law must have an cap. We recommend the change to the minimum be limited to +/- 3% annually.

6. City Council Authority - If Flagstaff is going to have a minimum wage law, then City Council should have authority to intervene if deemed necessary. We recommend that changes to minimum wage laws be authorized by a majority vote of City Council.

7. The $15 Maximum wage - The politically expedient $15/hr minimum wage has no factual or statistical evidence to support it here in Flagstaff.

It is our suggestion that the city should commission an annual assessment of the health of Flagstaff’s economy. As part of that assessment, minimum wage rates should be evaluated and reported to council. Should council agree by a super majority vote, the minimum wage could then be adjusted.

These positions are currently being refined and will evolve as additional input/collaboration with the community occurs. Thank you very much for your consideration.

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