While it waits for resolution of the litigation enveloping other cities’ decisions to enact similar measures, Tempe has decided to pause its plan to implement a prevailing wage policy for local construction contracts.
Following prevailing wage ordinance approvals in Phoenix and Tucson, Tempe passed its own measure in May.
Promoted as a way to ensure fair pay for construction workers and reduce the risks of projects employing illegal labor or undocumented workers, prevailing wage rules are set by federal labor officials as being the “typical” pay for specific worker types in specific geographic areas. Such rates are almost always greater than the area minimum wage.
Prevailing wage ordinances are also claimed to help ensure companies do not gain an unfair advantage in bidding for municipal construction contracts by underpaying workers.
The issue has become highly partisan, with Democrats and labor organizations generally favoring prevailing wage, and Republicans and business groups generally opposing it.
Because of the way prevailing wages are calculated, companies with unionized workforces are claimed to have a distinct advantage in securing municipal construction contracts. Opponents also claim prevailing wage rules significantly increase the costs of taxpayer-funded projects and create administrative burdens that discriminate against smaller companies.
Cities’ use of prevailing wage ordinances is specifically prohibited under a 1984 Arizona state law. Tempe, Phoenix and Tucson, however, relied on a 2023 opinion by Arizona Attorney General Kris Mayes, a Democrat, that used a later voter-approved change to the overall minimum wage law as justification for implementing prevailing wage rules.
The Goldwater Institute filed lawsuits against Phoenix and Tucson for their ordinances before Tempe approved its measure. Goldwater claimed Mayes’ opinion was in error and the 1984 prohibition was still in place and valid.
A Maricopa Superior Court judge ruled in favor of Goldwater in June and struck down the Phoenix and Tucson ordinances.
Tempe announced earlier this month it was pausing implementation of its rule. City officials said they remain committed to “ensuring workers are paid fair wages on City projects” but that they have to wait until the current litigation is resolved.
Phoenix and Tucson plan to appeal the Superior Court decision, and Tempe plans to join them in that action. No timeline has been announced as to when the appeal will be filed. All three cities plan to reinstate their ordinances if the appeal is successful. (Source)